Pakistan ferrous scrap importers continue to defer purchases as the standoff between suppliers and buyers continued on Thursday. Despite the sharp rise in the international market, some mills still preferred to wait as they had enough scrap inventory, but if supplies continue to tighten, mills are likely to resume bulk inquires.
The daily Davis Index for containerized shredded, Thursday, inched up by $2.2/mt to settle at $368.13/mt cfr Port Qasim, with offers nearing 28-month high. Trades for containerized EU and UK-origin shredded were at $365-368/mt cfr Port Qasim, with offers subsequently touching $370-375/mt cfr Port Qasim on Thursday. A shortage of shipping containers and material kept yards away from the market. Collection rates could fall in the coming days due to severe winters in supplier countries.
The Davis Index for UAE-origin HMS 1&2 (80:20) settled at $356/mt cfr Port Qasim, up by $3/mt from Wednesday. Trades for the grade reported near $355/mt cfr Port Qasim, gaining $7/mt from Monday. Traders who had secured materials around a month ago at lower prices are offering HMS 1&2 (80:20) even at $355-360/mt cfr Port Qasim, citing bullish global market.
Pakistan mills preferred shredded over HMS scrap to avoid paying extra taxes imposed on the imports of the latter. Trades for containerized Dubai-origin mixed #1 HMS and P&S sarya scrap were stable at prices above $355-360/mt cfr Port Qasim.
The index for US-origin HMS 1&2 (80:20), Thursday, settled at $351.46/mt cfr Port Qasim, up by $3.13/mt from Wednesday. Containerized scrap offers from the US and UK were limited in anticipation of an extended uptrend over the next few months. Most US suppliers could attempt to raise offers after the Thanksgiving holiday.
There were no offers from the South African suppliers for containerized ferrous scrap as their International Trade Administration Commission has decided to ban exports to support domestic industry. Plunging collection rates are likely to keep West African suppliers away from any negotiations at least till January.
In the domestic market, Bala billet prices were stable at PKR92,500-93,000/mt ($581-584/mt) ex-works Punjab. Trades, albeit limited, were reported for rebar after prices in the Southern region rose to PKR111,500/mt ex-works Karachi. In Punjab, G-60 rebar prices were at PKR109,500-110,000/mt ex-works. Mills cancelled discounts on finished steel as they face a cash crunch.
A few rerolling mills in northern Pakistan are shutting down amid cash crunch due to non-payment and limited demand for finished products. Market conditions remain unsupportive for production.
Domestic scrap prices maintained an uptrend following strong global cues. Prices for Art Q toke scrap equivalent to mix HMS and P&S was at PKR71,000-71,300/mt ex-works Lahore, inching up by PKR300/mt from Wednesday. Trades for the Pure Q Toke (shredded) concluded at PKR72,000-72,200/mt ex-yard with a few attempting PKR72,500/mt ex-works.
($1=PKR159.2)