Imported scrap prices in Pakistan dropped by $20-25/mt this week on global cues and the COVID-19 related lockdown in the country. The total number of cases crossed 1,000 on Friday and more than 95pc steel production halted in the country.
Thin trades were reported early in the week as mills booked ferrous scrap at lowered prices. Sellers looked to liquidate inventories before the situation worsened. The Pakistan Rupee (PKR) depreciated to PKR161.46 against US$1 on March 27 from PKR158.73 on March 20.
The weekly Davis Index for containerized shredded dropped by $25/mt to settle at $256/mt cfr Port Qasim on Friday. Early this week, trades for containerised shredded concluded at $255-260/mt cfr Qasim. Bids from buyers subsequently fell below $250/mt cfr Qasim. A few transactions were heard in the range $245-250/mt cfr Qasim late in the week before markets and major mills shut.
Imported scrap prices dropped by $50/mt last two weeks driven by a drop in Turkey bulk market. Prices declined by a similar amount even in the container market. Traders will be away from the market for two weeks at the minimum. Another $20-30/mt drop could be reported in the next few days and take prices to their lowest since 2015, according to a trader.
Pakistan has stopped receiving scrapped ships at its Gadani’s recycling yards, but vessel movement at Qasim port continues. The Davis Index for Dubai-origin #1 HMS settled at $265/mt cfr Port Qasim, down by $15/mt from the prior week. Offers for a mix of #1 HMS and P&S were at $265-270/mt cfr Qasim, with no takers at those levels. The Davis Index for P&S settled at $268/mt cfr Port Qasim, down by $17/mt from the prior week.
The index for busheling settled at $278/mt cfr Port Qasim, down by $15/mt from the prior week. Containerised HMS 1&2 (80:20) from the UK and US was offered at $250-255/mt cfr Port Qasim, down by $15/mt from the prior week. South Africa #1 HMS prices were in the range of $260-265/mt cfr Port Qasim. But late in the week transactions came to a standstill after the country announced a lockdown for three weeks. Buyers are expected to return to the markets as soon as activities resume post the lockdown, state traders.
Pakistan’s domestic steel market silent
Scrap yards and mills stayed away from markets and the weekly domestic steel prices remained unchanged this week.
The weekly Davis Index for commercial Bala billet settled flat at PKR87,500/mt ex-yards Punjab inclusive of local taxes. The Davis Index for G-60 billet settled at PKR93,250/mt cfr Qasim, also unchanged from the prior week.
Almost 95pc of small and medium scale steel makers have turned off their furnaces in Sindh and Karachi as their employees adhere to social distancing mandated by the lockdown. The Davis Index for G-60 rebar settled flat at PKR108,500/mt ex-plant Karachi and PKR107,500/mt ex-plant Punjab.
Domestic scrap prices in Pakistan remained flat with medium grade scrap equivalent to shredded offered at PKR67,250/mt and mixed HMS and P&S at PKR66,500/mt ex-works.