Imported ferrous scrap buyers delayed purchases amid weak domestic steel demand in Pakistan and Bangladesh. Scrap prices remained under pressure and only deals for small quantities were reported at prices lower by $5-10/mt from Friday.
Pakistan
Pakistani steel mills were slow to book imported ferrous scrap Wednesday amid weak domestic steel demand. However, the rise in domestic scrap prices on limited supply encouraged traders to book imported scrap containers.
The Davis Index for containerized shredded Wednesday settled at $320/mt cfr Port Qasim, down $0.31/mt from Tuesday. Mills refused higher-priced scrap offers to avoid risks amid weak steel demand.
Trades for European origin shredded in containers reported at $315-317/mt cfr Qasim on Wednesday. Most bids placed on Wednesday were at $315-317/mt cfr Qasim against offers of $320-322/mt cfr Qasim. A few suppliers held offer firm at above $320/mt cfr Qasim for the grade.
The Davis Index for UAE-origin HMS 1&2 (80:20) Wednesday settled flat at $309/mt cfr Port Qasim from the prior day. Buyers lowered bids for HMS scrap in line with shredded scrap to $300-305/mt cfr Qasim. Trades for UAE-origin mixed #1 HMS and P&S sarya scrap were reported at $315-320/mt cfr Port Qasim. Bids remained mostly at around $305/mt cfr Qasim. Buyers continued to preferred UAE-origin scrap due to shorter delivery times.
The index for US-origin HMS 1&2 (80:20) settled at $306.93/mt cfr Port Qasim, down $0.36/mt as buyers placed bids at $303-305/mt cfr Qasim on Tuesday.
In the domestic market, Bala billet prices reported at PKR92,000/mt ex-works Punjab on Wednesday, down PKR500/mt from the prior day with limited trades being materialised. Domestic Pure Q toke scrap equivalent to shredded at PKR72,000-72,500/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. Being unable to raise the price of rebar to cover for high raw material prices and are thus avoiding imported scrap. Rebar trades reported 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.
On the other hand, prices of HRC imports from China rose. Leading steelmakers offered discounts of up to PKR2,000/mt to liquidate their inventories, but paid a higher price of $530-535/mt cfr Qasim for HRC imports from China.
Bangladesh
Bangladesh’s ferrous market remained silent as most steelmakers are struggling with cash flow crunch. Steel mills are under pressure to liquidate their finished steel inventories at a discount which have kept domestic steel prices lower despite recovering demand.
The Davis Index for containerized shredded settled Tuesday at $327.50/mt cfr Chattogram down $0.36/mt from Tuesday. The prices have dropped by $7-8/mt amid weak demand after last week’s peak levels. A few trades for shredded reported at $325-328/mt cfr Chattogram. A few buyers were interested in shredded from Australia and New Zealand at $322-325/mt cfr Chattgram.
The index for US-origin HMS 1&2 (80:20) was at $317.5/mt cfr Chattogram, up $1.5/mt from Tuesday. Sellers offered HMS 1&2 (80:20) at $320-325/mt cfr Chattogram, while buyers were still at $315-318/mt cfr Chattogram.
The index for Latin America-origin HMS 1&2 (80:20) settled unchanged at $310/mt cfr Chattogram in absence of trades. 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 on Wednesday. Domestic shipbreaking scrap equivalent to P&S were offered at BDT31,000-31,500/mt del mill, stable after rising BDT500-1000/mt a week earlier while HMS 1&2 (80:20) traded at BDT29,000/mt ex-Chattogram, flat from Friday.
Amid weak domestic demand, most small and medium scale steelmakers in Dhaka expect 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. This has significantly reduced containerised scrap trades to Bangladesh.
($1= PKR166.98; BDT85.3)