The Davis Index for containerized shredded, Tuesday, settled at $425/mt cfr Port Qasim, unchanged from Monday. A thin volume of shredded sold at $430-535/mt cfr Qasim, however, bids remained low at around $420-425/mt cfr Qasim.
Trading remained mostly closed on Tuesday, on account of a national holiday to celebrate Pakistan’s Resolution day. Both buyers and sellers remained silent with no major deals reported. Few deals for urgent requirements are expected but the possibility of active restocking is limited, believe traders.
Hike in container freight rates have increased the landed cost of scrap, but sellers refused bids below $425-430/mt cfr. The freight gap between India and Pakistan has widened by over $10/mt. Despite the drop in Indian prices offers to Pakistan remained comparatively higher on Tuesday, said, traders.
In Turkey, a slump in the Lira’s value against the US dollar stalled imports. The index for HMS 1&2 (80:20), Friday, fell by $3.50/mt to $419.17/mt cfr Turkey. Prices have dropped by over $25/mt in less than 10 days. Domestic scrap prices dropped to around $400/mt delivered mills, losing $10/mt from the prior week.
In Pakistan, the daily index for US-origin HMS 1&2 (80:20), Tuesday, settled at $410/mt cfr Port Qasim, unchanged in absence of major deals. Landed cost on a cfr basis remained high due to a hike in freight component on the New York to Pakistani port route.
Scrap markets in Pakistan are expected to go into hibernation with the start of Ramadan from April 14 and there is limited room for a recovery in Pakistani scrap prices in the next 20 days.
Offers for #1 HMS and PS from UAE, however, increased to $415-425/mt cfr Port Qasim, depending on quality. The Davis Index for UAE-origin HMS 1&2 (80:20) settled at $405/mt cfr Port Qasim, up by $2/mt from Monday. A few trades reported at $405-410/mt cfr Qasim on improved demand.
Domestic scrap prices rise on demand
On Tuesday, Bala billet offers increased to PKR105,500-106,500/mt ex-works, up PKR500/mt from Monday. Domestic steel prices are finding ground and less likely to drop in the coming days, said market participants. Steel demand has remained subdued for over a month in Pakistan.
Asking rates for rebar dropped amid increased availability of discounted rebar in the market. Rebar offers heard at PKR134,000-134,500/mt ex-works Karachi, while in Punjab at PKR129,000-129,500/mt ex-works.
Delays in imported scrap deliveries amid shipping line issues are driving domestic scrap trades in Pakistan. Offers for Art Q toke scrap equivalent to a mix of HMS and PS, Tuesday, rose to PKR86,000-86,500/mt ex-yard Lahore. Trades for Pure Q toke scrap equivalent to shredded were at PKR87,000-87,500/mt ex-yard Lahore, up PKR500-800/mt.
The Pakistani rupee has appreciated to its highest levels in 2021 to PKR155 against the US dollar. Appreciation of currency could support imports in the coming days. Also, strong auto demand has encouraged HRC makers to lift prices twice in March by PKR2,000-3,000/mt amid bullish global cues for flat steel.