Imported ferrous scrap prices in Pakistan were on an uptrend this week as mills restocked amid declining inventories. Trading was also supported by indications of a firm scrap market in November. Domestic ferrous scrap prices, however, declined as traders reduced asking prices to sell off material before some small-scale secondary mills pause operations for winter.
The Davis Index for containerized shredded, Friday, rose by $8.25/mt from the prior week to settle at $325/mt cfr Port Qasim. Trades for shredded of EU/UK-origin were at $323-325/mt cfr Port Qasim this week.
Dubai-origin #1 HMS scrap in containers traded at $315/mt cfr Port Qasim. Offers for PNS sarya scrap were at $315-320/mt cfr Port Qasim, but buyers were not keen on purchasing this grade similar to HMS, which invoke extra taxes compared to shredded. The Davis Index for UAE-origin HMS 1&2 (80:20) settled at $311/mt cfr Port Qasim, up by $5/mt from prior Friday. Offers from South American ferrous scrap suppliers were at $300-305/mt cfr Qasim.
Pakistan ferrous scrap importers are paying $3-5/mt higher than their Indian counterparts due to increased container freight charges. A gradual resumption in mega infrastructure projects is likely to improve steel demand in the country. Compared to the beginning of the week, however, the appetite for restocking slowed down on Friday.
The index for US-origin HMS 1&2 (80:20) settled at $311.14/mt cfr Port Qasim, up by $1.07/mt from Thursday and by $4.64/mt from the prior week. US East Coast-based recyclers have lifted their offers for containerized scrap due to strengthened domestic steel demand.
The weekly Davis Indexes for P&S and #1 busheling settled at $326/mt and $340/mt cfr Port Qasim, up by $6/mt and $7/mt, respectively. Some mills in dire need of these grades paid higher prices to restock, anticipating short supply towards the year close due to seasonal concerns.
Domestic steel
The weekly Davis Index for commercial Bala billet, Friday, settled at PKR90,250/mt ex-works Punjab inclusive of local taxes, up PKR250/mt. Early this week, prices for Bala billets had declined to touch PKR89,500/mt ex-works, but later in the week, mills increased their asking prices to cover the rise in imported scrap prices.
The Davis Index for G-60 billet settled at PKR96,000/mt ex-works Punjab, unchanged from the prior week. Trades for the grade resumed as demand as downstream industries showed signs of recovery.
The weekly Davis Index for G-60 rebar settled flat at PKR109,500/mt ex-works Karachi. In Punjab, G-60 rebar prices were at PKR108,500-109,000/mt ex-works, down by PKY500-1,000/mt from the prior week. The Pakistani rupee has appreciated to PKR160.62 against $1 from 162.5 levels last week, boosting sentiment in the import market.
Domestic scrap
In Lahore, the local government could ask some secondary steel mills, especially those without smog or carbon emission control machinery, to pause production for a few weeks due to heavy smog. This dip in production could impact domestic ferrous scrap prices. The index for Pure Q toke scrap equivalent to shredded dropped by PKR250/mt at PKR68,500/mt ex-works Lahore, Friday, down from late last week. The weekly index for Pure Q Toke (shredded) fell by PKR500/mt to PKR69,500/mt ex-works in line with easing supply.
($1=PKR160.62)