Pakistani ferrous scrap importers continued to stay silent on Monday amid softening global cues. Sellers, however, kept offers unchanged citing elevated containerized freight rates on tight container availability.
Weak domestic steel sales and falling Chinese steel prices weighed down sentiment in the Pakistan market. In China, iron ore prices also dropped by over $8-10/mt below $210/mt cfr north China.
The daily Davis Index for containerized shredded, Monday, inched up by $0.71/mt to $535/mt cfr Port Qasim. Offers for containerized UK/EU origin shredded were unchanged in the range $535-540/mt cfr Qasim. Turkish bulk scrap prices were at a standstill, with mills targeting lower bids. In Turkey, the daily Davis Index for imports of US-origin HMS 1&2 (80:20) on Friday was unchanged at $500/mt cfr. A fall in rebar export offers pulled bids down, and mills looked for small cargo deals at $490/mt cfr Turkey.
The Davis Index for UAE-origin HMS 1&2 (80:20), Monday, settled at $497/mt cfr Port Qasim, down $3/mt. Deals for UAE-origin mixed #1 HMS and P&S were reported at $508-510/mt cfr Port Qasim. Pakistani importers lowered bids amid a decline in buying interest in India.
Strengthening prices for prime grades globally amid tight availability is likely to push prices in the US domestic market further up. The daily index for US-origin HMS 1&2 (80:20), Friday, settled at $509/t cfr Port Qasim, up by $2.75/mt from Friday. For July settlements, suppliers could target another $30-50/gt rise for prime grades.
In the Pakistan domestic market, offers for Bala billet were at PKR116,000-116,300/mt ex-works Punjab. For rebar, asking rates were unchanged at PKR145,500/mt ex-works Karachi and PKR144,000/mt ex-works Punjab.
A few yards were looking to sell off material before the financial year closes on June 30. For Art Q toke scrap (equivalent to a mix of HMS and P&S) and Pure Q toke scrap (equivalent to shredded), on Monday, offers were at PKR94,000/mt and PKR95,000/mt ex-yard Lahore, respectively.
The arrival of monsoon and lack of clarity on the tax reduction announced in the budget FY21-22 has slowed trading in the steel and scrap markets. Pakistan Association of large-scale producers (PALSP) has raised concerns over the withdrawal of 17pc Federal Excise Duty for steel producers in the former FATA/PATA tribal area. They state the move could lead to annual tax revenue losses estimated at PKR50bn.
($1=PKR157.32)