Imported ferrous scrap inquires in Pakistan continued to pick up gradually despite the Eid holidays. Mills are keen to restock ferrous scrap amid tight supply but showed resistance to a sharp hike in offers on Friday. After witnessing active purchases in the Turkish bulk market, trades slowed.
Ferrous scrap offers in containers have surged rapidly, however, prices may stabilize as many governments, including China, are taking notice of high steel prices and could intervene to tame them down, as per market participants.
Pakistani market was closed on the occasion of national holidays for Eid. The pace of trading would pick up once mills resume bookings after May 17. Few traders are optimistic of bookings next week as depleting inventories could force them to book despite high prices and slow domestic steel demand amid high COVID-19 infections.
The daily Davis Index for UAE-origin HMS 1&2 (80:20), Friday, settled unchanged at $500/mt cfr Port Qasim. From last Friday, the index increased by $35/mt. On Friday, offers for UAE-origin mixed #1 HMS and P&S were at $505-510/mt cfr Qasim. UAE-based sellers were active despite holidays as prices could stay firm as Indian mills accept higher offers.
Trades for shredded for immediate melt requirements, despite Eid holidays. Sellers continued to raise offers taking cues from global markets. The daily Davis Index for containerized shredded, Friday, settled at $519.5/mt cfr Port Qasim, down $4.43/mt. The index rose by $19.5/mt from the prior Friday. Deals reported at $515-520/mt cfr Qasim for material from the EU/UK. Expectations from sellers were in the range of $520-525/mt cfr Qasim driven by higher post-Eid demand expectations.
The daily index for US-origin HMS 1&2 (80:20), Friday, was stable at $505/mt cfr Port Qasim. Index spiked by $40/mt from the prior Friday nearing the prior high seen during late 2008. Suppliers raised offers by at least $30-40/mt driven by a jump in global steel prices by over $50-70/mt.
The Davis Index for P&S 5ft and #1 busheling on Friday settled at $535/mt and $555/mt cfr Port Qasim, respectively. On weekly comparison, indices rose by $33/mt. Supply for prime grades remained tight while the holiday mood resulted in suspended trades over this week.
Eid halts steel trade
In the domestic market, the index for domestic Bala billet rose by PKR250/mt to PKR111,750/mt ($734/mt) ex-works. The weekly Davis Index for G-60 billet remained unchanged at PKR116,000/mt ex-works Punjab. Amid almost halted trading for finished steel, the weekly Davis Indexes for rebar settled unchanged at PKR136,000/mt ex-works Karachi and PKR132,250/mt ex-works Punjab, respectively.
Amid rising raw materials prices and high input costs, most large steelmakers in Punjab and Karachi are likely to lift the asking prices for rebar. Mills are optimistic of steel demand post-Eid.
Domestic ferrous scrap supply remained tight. The weekly indexes for Art Q toke scrap equivalent to a mix of HMS and P&S, Friday, settled at PKR90,500/mt ex-yard Lahore, up PKR500/mt. The weekly index for Pure Q toke scrap (equivalent to shredded) settled at PKR91,500/mt ex-yards Lahore, up PKR50/mt.
($1=PKR152.2)