Imported ferrous scrap prices in Pakistan and Bangladesh dropped as buyers delayed purchases of ferrous scrap amid weak domestic steel demand. Ferrous scrap prices remained under pressure and deals for small quantities only were reported at prices that were $5-10/mt lower from Friday. Weak finished steel demand in Pakistan and heavy floods in most steel manufacturing regions in Bangladesh restricted trades in both countries.
Pakistan’s imported limited ferrous scrap amid weak domestic steel demand but rise in domestic scrap prices due to limited supply encouraged traders to book imported scrap in containers. The country’s National Tariff Commission (NTC) has proposed a reduction in tariff on imports of finished and semi-finished steel products. Pakistan’s large steel producers have opposed this move as it could result in deindustrialization.
The Davis Index for containerized shredded on Thursday settled at $318.81/mt cfr Port Qasim, down $1.19/mt from Wednesday. Mills refused higher-priced scrap offers to avoid risks.
Trades for European-origin shredded in containers were reported at $315-317/mt cfr Qasim though bids from mills were at $315-318/mt cfr Qasim against offers of $320-322/mt cfr Qasim. The disparity between bids and offers resulted in limited trades to conclude in Pakistan.
The Davis Index for UAE-origin HMS 1&2 (80:20) Thursday dropped to $305/mt cfr Port Qasim, down $4/mt from the prior day. Buyers lowered bids for HMS scrap in line with shredded scrap in the range $300-305/mt cfr Qasim. Trades for UAE-origin mixed #1 HMS and P&S sarya scrap were reported at $315/mt cfr Port Qasim. Buyers continued to prefer UAE-origin scrap due to shorter delivery times, while some decided to wait for clarity on prices in the coming days.
The index for US-origin HMS 1&2 (80:20) settled at $303.21/mt cfr Port Qasim, down $3.72/mt. Prices dropped in the range $302-305/mt cfr Qasim as buyers’ bids were at $295-300/mt cfr Qasim on Thursday.
In the domestic market, Bala billet prices started losing steam amid continuous weak demand for steel. Prices were at PKR91,500-92,000/mt ex-works Punjab on Thursday, down PKR500-1,000/mt from early this week. Domestic Pure Q toke scrap equivalent to shredded at PKR72,000-72,300/mt ex-works Lahore adjusting marginally after a sharp rise from a week ago.
The situation in Pakistan’s domestic market remained unchanged. Finished steel sales are not picking up causing concerns for most mills in the southern region. Steelmakers are unable to raise the price of rebar to cover the cost of raw material and are thus avoiding imported scrap. Rebar trades were reported at PKR109,000-110,000/mt ex-Karachi after discounts. Gadani’s shipbreaking market remained stable and bid $350-360/ldt for scrapped containers and tankers.
Leading steelmakers in Karachi offered discounts of up to PKR2,000/mt to liquidate their inventories. Improving demand from the auto industry resulted in Pakistan paying a higher price of $530-535/mt cfr Qasim for HRC imports from China.
Bangladesh’s ferrous scrap market witnessed only containerised trades while major mills have refused bulk trades awaiting correction in prices. Domestic demand remained subdued as most steelmakers are struggling with cash flow crunch. Transportation activities were disturbed due to heavy rains and floods in the outskirts of Dhaka. Steel mills were under pressure to liquidate their finished steel inventories at a discount which has kept domestic steel prices lower despite recovering demand.
The Davis Index for containerized shredded Thursday was at $326.43/mt cfr Chattogram, down $1.07/mt from Wednesday. The prices have dropped by $7-8/mt amid weak demand after last week’s peak levels. Trades for shredded from EU and UK yards were reported at $328-330/mt cfr Chattogram. A few buyers concluded shredded from Australia and New Zealand at $325/mt cfr Chattgram. In the bulk market, US West Coast suppliers offered HMS 1&2 (80:20) at $330-335/mt cfr Chattogram with no buyers this week.
The index for US-origin HMS 1&2 (80:20) was at $315.07/mt cfr Chattogram, down $2.43/mt from Wednesday. Sellers offered HMS 1&2 (80:20) at $320/mt cfr Chattogram, while buyers were only at $310-315/mt cfr Chattogram.
The index for Latin America-origin HMS 1&2 (80:20) settled at $306/mt cfr Chattogram, down $4/mt from the prior week. Offers remained scarce as buyers bid $310-315/mt cfr Chattogram for #1 HMS.
Limited supply kept Bangladeshi domestic ferrous scrap prices stable after rising. Domestic shipbreaking scrap equivalent to P&S was offered at BDT31,000-31,500/mt del mill from a week earlier while HMS 1&2 (80:20) traded at BDT29,000/mt ex-Chattogram, flat from Friday. Billet offers were stable at BDT41,000/mt ex-works, range-bound for the past few weeks.
Amid weak domestic demand, most small and medium scale steelmakers in Dhaka are in wait-and-watch mode, expecting the prices to drop further in the coming days. Small scale producers offered rebar at BDT49,000-49,500/mt ex-works while medium scale mills sold rebar at BDT50,500-51,000/mt ex-yards. Only branded rebar suppliers were able to afford imported scrap. Almost 60pc of the steel mills in Dhaka are on the verge of shutting down as they are unable to sell rebar at a profit.
($1= PKR167.38; BDT85.41)