Bids for imported ferrous in Pakistan continued to soften, weighed down by a decline in Chinese steel futures, depreciation of the currency, and the announcement of a partial lockdown including lockdowns in the Sindh region until Aug 8.
Demand for steel, except for graded rebar remained subdued. The Pakistani rupee reached PKR164.3 on Tuesday, from PKR161.3 on July 27.
Mills on Tuesday were unwilling to accept offers above $535/mt cfr Qasim for shredded scrap after a few deals in the range between $535-540/mt cfr Qasim. The daily Davis Index for containerized shredded, Tuesday, dropped by $5/mt to settle at $535/mt cfr Port Qasim. Bids were at $530-533/mt cfr Qasim, which were refused by sellers citing improved rebar sales and prices.
Secondary and rerolling mills are expected to begin restocking scrap inventories as full-scale operations have resumed post-Eid holidays.
In China, steel futures continued a downtrend on Tuesday. Futures eroded over 4pc on Tuesday. Domestic rebar and HRC prices in the spot markets declined by CNY50-100/mt. Sentiment in Southeast Asian markets was also bearish amid a record rise in COVID-19 cases and fears of a potential third wave.
Turkish mills believed scrap supplies have eased. Domestic rebar prices showed a downtrend of $10-15/mt. The index for US-origin HMS 1&2 (80:20) remained unchanged at $469.84/mt cfr Turkey on Monday. Global price trends dampened buying interest, as most participants decided to wait for clarity in the coming days.
Sellers in the UAE continued to offer HMS scrap in Pakistan amid steady demand. With the decline in shredded prices, buyers could opt for shredded instead of HMS. The daily Davis Index for UAE-origin HMS 1&2 (80:20) declined by $5/mt to $495/mt cfr port Qasim.
Trades for UAE-origin mixed #1 HMS and P&S were at $505-510/mt cfr Port Qasim.
The daily index for US-origin HMS 1&2 (80:20), Tuesday, settled down to $492.5/mt cfr Port Qasim. Containerized export offers from the US East Coast dropped following an improvement in the supply of heavy melt scrap. US domestic prices for August could decline by $20-30/mt.
Most large-scale steel producers have hiked rebar prices on high input costs. On Tuesday, rebar G-60 was offered at PKR166,000-169,000/mt ex-works depending on origin. Prices for rebar have jumped over PKR10,000/mt on positive sentiment. But sales slowed as buyers refused to absorb the price rise in the market.
For domestic Bala billet, offers were unchanged at PKR137,000-137,500/mt ex-works.
For Art Q toke scrap (equivalent to a mix of HMS and P&S) prices jumped to PKR105,500-106,000/mt ex-yard Lahore. Following rebar prices, yards raised domestic scrap prices by a minimum of Rs4,000/mt. Pure Q toke scrap (equivalent to shredded) rose by PKR4,500/mt to PKR107,500/mt ex-yard Lahore.