The Pakistan government has extended its national lockdown till April 14 from the earlier deadline of April 6 as the country tries to control spread of COVID-19. Amid the lockdown, the domestic steel market has turned silent with induction furnaces shut and primary electric arc furnaces dialling down their production. Ship breaking activities at Gadani also have been shut to follow social distancing. The Pakistan Rupee depreciated to PKR168.32 against US$1 on April 3, from PKR161.4 on March 27.
Imported scrap prices in Pakistan continued their fall and dropped by $15-20/mt following global cues and a steep drop in demand. Traders found it difficult to bear detention and demurrage charges at Qasim port and have sought government’s support for a waiver.
The weekly Davis Index for containerized shredded dropped by $20/mt to settle at $236/mt cfr Port Qasim on Friday. Early this week, trades for containerised shredded concluded at $235-240/mt cfr Qasim. Bids from buyers subsequently fell below $230/mt cfr Qasim. Later, suppliers withdrew new offers citing a sharp decline in collection rates and operational difficulties.
Imported scrap prices dropped by $80/mt in a months’ time and has a hit three- month low according Davis Index price analysis.
The Davis Index for Dubai-origin #1 HMS settled at $253/mt cfr Port Qasim, down by $15/mt from the prior week. Offers for a mix of #1 HMS and P&S were at $250-255/mt cfr Qasim, with no takers at those levels. The Davis Index for P&S settled at $248/mt cfr Port Qasim, down by $20/mt from the prior week.
The index for busheling settled at $263/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 $235-240/mt cfr Port Qasim, down by $15/mt from the prior week. South African sellers loaded earlier bookings as their government allowed ports to function despite quarantine measures.
Pakistan’s domestic steel market standstill –
Scrap yards and steel mills stayed away from any activity and markets came to a standstill. Immediately after after the lockdown ends, availability of casual labour and transporters would become scarce as people are set to go home for Ramdan holidays.
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. 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.