Pakistan ferrous scrap buyers stepped back on Tuesday amid a continued rise in offer prices. Mills focused on boosting finished steel sales. Buyers could hold back ferrous scrap purchases until rebar price hikes are absorbed by the market.
As a result of changes in the fixed import tariffs price for imported steel and compressor scrap (ITP), input costs of steelmakers have gone up, keeping buyers away from raw material purchases.
The Davis Index for containerized shredded, Tuesday, settled at $472.08/mt cfr Port Qasim, up by $0.65/mt from Monday. Offers from the UK and European suppliers were in the range of $475-480/mt cfr Port Qasim. But most buyers resisted prices over $465/mt cfr Qasim
In Turkey, offers for bulk HMS 1&2 (80:20) were above $460-465/mt cfr. With rising rebar prices in the domestic market, Turkish mills are expected to increase their bids for the remaining tonnage of seaborne scrap for April shipment.
The daily index for US-origin HMS 1&2 (80:20) settled at $435/mt cfr Port Qasim, up by $1.25/mt amid firm offers and a healthy domestic steel outlook for March.
Trades for #1 HMS and P&S from UAE were reported at $440-445/mt cfr Port Qasim, depending on quality. The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled at $435/mt cfr Port Qasim, up by $2/mt on Tuesday. Dubai-based sellers preferred to sell in Pakistan where they fetched premium over other subcontinental markets.
Domestic billet and rebar up
Bala billet prices in the domestic market were at PKR108,000/mt ex-works on Tuesday. Billet prices have recovered by PKR14,000/mt from their bottom on January 22. Some mills announced price hikes for rebar. But trades were reported at lower prices. Rebar was offered PKR133,000-135,000/mt ex-works Karachi and PKR129,000-130,000/mt ex-works Punjab and Lahore.
Mills faced a margin squeeze as rebar prices dropped below PKR143,000-144,000/mt ex-works. Thus most mills are waiting for prices to drop before they restock any materials.
Domestic scrap firm
Trades for Art Pure Q toke scrap equivalent to a mix of HMS and P&S, Tuesday, were at PKR85,000-85,500/mt ex-yard Lahore. Offers for Pure Q toke scrap equivalent to shredded were at PKR86,500-87,000/mt ex-yard Lahore. Domestic scrap yards raised offer prices on increased landed costs after changes in ITP structure.
In Gadani, shipbreaking scrap equivalent P&S traded at prices above PKR88,500-89,000/mt ex-yards.
For shipbreakers, offers for vessels were in the range of $450-460/ldt amid improving sentiment.