Pakistani mills turned cautious after buying aggressively late last week and on Monday. Several offers from suppliers and traders are active in the market. After buying around 20,000mt of shredded in containers over the weekend, momentum slowed on Wednesday. Few mills lowered bids citing a marginal downtrend in domestic billet and scrap prices.

 

Large steelmakers are keen on raising rebar prices to safeguard margins as sales are expected to remain slow for the next few days. Mills are watching the Turkish market closely to gauge price direction.  

 

The daily Davis Index for containerized shredded, Wednesday, slipped by $3.41/mt to $504.72/mt cfr Port Qasim. Sellers held offers in containers at $510/mt cfr Qasim but no new deals reported. Around 5,000mt of UK and EU-origin shredded in containers was sold at $505/mt cfr Qasim over the weekend and early this week. A leading trader bought 10,000mt shredded in a single order at $508/mt cfr Qasim as Karachi-based rebar producers began restocking scrap inventories.

  

US and European suppliers continued to focus on their domestic markets amid bullish demand. The daily index for US-origin HMS 1&2 (80:20) settled at $460/mt cfr Port Qasim unchanged from Tuesday in the absence of major deals.

  

Suppliers from UAE offered #1 HMS to Pakistani buyers at $460/mt cfr Port Qasim. The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled at $455/mt cfr Port Qasim, up $1/mt from the prior day. A slip in domestic steel prices lowered bids from Indian buyers, which could pressure UAE origin HMS scrap prices in the next few days, said traders.  

  

Increasing number of offers could tilt negotiations in favour of mills with indications are marginally down since the start of the week.  

 

Steel prices dip on slow sales

Domestic steel prices, which had spiked in a short span, continued losing steam since Monday. Despite high imported scrap prices, a few mills started offering discounts on steel products. Billet prices dropped amid production cuts in a few regions due to harsh winter season. On Wednesday, domestic Bala billets traded at PKR103,000-104,000/mt ex-works Lahore down PKR2,000/mt in three days.  

 

On the other hand, large steelmakers are unable to bear high raw material prices and are likely to attempt another price hike in the next few days. In Karachi, major rebar makers kept their asking rates unchanged amid high ferrous scrap prices. Major mills in Pakistan are offering G-60 rebar 12-32mm at PKR140,000/mt ($872/mt) ex-works, while trades heard at PKR134,000-135,000/mt ex-works.  

 

Domestic scrap down

On Wednesday, local Art Q toke scrap equivalent to a mix of HMS and P&S offered at PKR83,500-84,000/mt ex-yard Lahore. Pure Q Toke (shredded) offered at PKR85,000-85,500/mt ex-yards, down PKR2,000/mt from Monday. For shipbreakers, offers for scrapped vessels remained higher than the workable range.  

 

($1=PKR160.64)

 

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