Pakistani mills resumed inquiries for imported scrap on Wednesday with an intent to refill inventories before Ramadan. Trading was closed, Tuesday, on account of a national holiday. Few deals for urgent requirements are expected but the possibility of active restocking is limited given only 20 days are left for the start of Ramadan.
The Davis Index for containerized shredded, Wednesday, settled at $428.21/mt cfr Port Qasim up $3.21/mt from Tuesday. Bids from Pakistani buyers raised bids by $5/mt to $425-430/mt cfr Qasim but suppliers’ expectations remained firm at $430-435/mt cfr Qasim. A thin volume of shredded sold at $430-435/mt cfr Qasim.
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 a drop in Indian prices offers to Pakistan remained comparatively higher on Tuesday, said traders.
In Turkey, a slump in Lira’s value against the US dollar stalled imports. Negotiations were paused with HMS 1&2 (80:20) bids at around $415/mt cfr Turkey. Prices have dropped by over $25-30/mt in less than 10 days. Domestic scrap prices in Turkey dropped to adjust for currency depreciation.
In Pakistan, the daily index for US-origin HMS 1&2 (80:20), Wednesday, settled at $410.71/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.
With the start of Ramadan from April 14, scrap markets in Pakistan are expected to go into a hibernation mode. There is limited room for a recovery in Pakistani scrap prices in the next 20 days.
Offers for #1 HMS and P&S 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 market remains standstill amid holidays
Domestic steel prices, Wednesday, remained largely stable amid limited demand and a national holiday on Tuesday. Bala billet offers were at PKR106,000-106,500/mt ex-works, up PKR300-500/mt from Tuesday. 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 P&S were at PKR86,000-86,500/mt ex-yard Lahore. Trades for Pure Q toke scrap equivalent to shredded were at PKR87,300-87,700/mt ex-yard Lahore, up PKR200-300/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.