Ferrous scrap importers stayed away from trades on Wednesday amid indications of softening prices in the global markets. In Pakistan and Bangladesh, steel mills were struggling with weak domestic steel demand and stayed cautious. In Pakistan, domestic steel prices dropped further while in Bangladesh, mills expect prices to recover only after mid-October.
In Turkey, US-origin HMS 1&2 (80:20) bulk prices dropped around $295/mt cfr Turkey, down $5/mt from last week in absence of trades. Bids for Baltic origin HMS (80:20) in bulk cargoes were reported at $290/mt cfr Turkey Wednesday. Yet, the possibility of a price increase in the EU/the US domestic markets in October kept many suppliers away from offering much at lower prices.
Pakistan
Imported scrap prices continued to drop in Pakistan as billet prices in the domestic market continued its downtrend. Prices were expected to drop as demand remains weak and many mills had kept prices high post COVID-19 recovery. These prices are now adjusting with rising supply, said a steelmaker.
Also, the possibility of dumping finished flat steel, especially HRC, from China at lower prices has pressured market sentiment and buyers stayed away from bookings to limit their risks.
The Davis Index for containerised shredded Wednesday settled at $312.29/mt cfr Port Qasim, down $2.5/mt from Tuesday. A few containerized deals of shredded scrap were reported at $312-313/mt cfr Qasim, though most yards have revoked their offers citing these low levels to be non-workable amid short supply. The disparity between bids and offers resulted in limited trades on Tuesday. Mills were making every attempt to find cheaper priced containers with bids around $308-310/mt cfr Qasim on Wednesday.
The Davis Index for UAE-origin HMS 1&2 (80:20) settled at $300/mt cfr Port Qasim, down $1/mt from Tuesday. Buyers lowered bids for HMS scrap, in line with falling shredded scrap prices in the range $290-295/mt cfr Port Qasim, and these levels could materialize into trades now. Trades for UAE-origin mixed #1 HMS and P&S sarya scrap reported at $305/mt cfr Port Qasim. GI scrap bundles traded at $315-320/mt cfr Qasim.
The index for US-origin HMS 1&2 (80:20) settled at $297/mt cfr Port Qasim, down $1.21/mt. Most US-based yards increased export offers citing a stronger market in October. Offers were at $300-305/mt cfr Qasim on Wednesday against expectations from mills of $295/mt cfr Qasim.
In the domestic market, Bala billet prices dropped another PKR300-500/mt in last couple of days. Prices were at PKR90,700-91,200/mt ex-works Punjab on Wednesday. Domestic Pure Q toke scrap equivalent to shredded traded at PKR71,000-71,200/mt ex-works Lahore. Weakened demand for finished steel and slower recovery in infrastructure projects prevented domestic prices from recovering sharply.
Major mills were under pressure to liquidate their inventories as they offered a huge discount on rebar prices. Trades for rebar were reported at PKR109,000-110,000/mt ex-works Karachi this week. Finished steel prices in Southern Pakistan were under pressure as leading steelmakers offered discounts to liquidate inventories.
Bangladesh
Bangladeshi importers resumed trades in containers as offers started to meet their desired bids this week. A few mills lowered bids further on Tuesday following global cues. Mills have sought government’s help to overcome the losses during the pandemic.
The daily Davis Index for containerized shredded Wednesday was at $324.17/mt cfr Chattogram, down $1.25/mt from Tuesday. The price sentiments remained under pressure. A few deals for shredded from Australia and New Zealand concluded at $320-323/mt cfr Chattogram against offers of $325-327/mt for UK-origin materials.
P&S scrap was offered at $315/mt cfr Chattogram on Wednesday, against bids of $310/mt cfr Chattogram from an EAF steelmaker. Domestic demand remains subdued in Bangladesh and most steelmakers are struggling with cash flow crunch. Transportation activities continue to be hit due to monsoon.
In the bulk market, US West Coast suppliers offered HMS 1&2 (80:20) at $325/mt cfr Chattogram, flat over this week, but no major trades were reported. The index for US-origin HMS 1&2 (80:20) Wednesday settled at $308.75/mt cfr Chattogram, down $0.18/mt from Tuesday. Sellers offered HMS 1&2 (80:20) at $315/mt cfr Chattogram, while bids were flat at $305-308/mt cfr Chattogram on Wednesday.
The index for Latin America-origin HMS 1&2 (80:20) settled at $301/mt cfr Chattogram, down $2/mt from Tuesday. Most Brazilian traders sought HMS 1&2 (80:20) at $305-310/mt cfr Chattogram while offers remained scarce. Brazilian yards offered #1 HMS at $310-315/mt cfr Chattogram to direct mills on Wednesday while mills booked grade only in the range $305-307/mt cfr Chattogram. Small scale furnaces were targeting Indian sponge and imported HMS scrap prices in the range $290-300/mt cfr Chattogram as viable.
Limited supply kept Bangladeshi domestic ferrous scrap prices stable after rising. Shipbreaking scrap equivalent to P&S was offered at BDT31,000/mt del mill from a week earlier, while HMS 1&2 (80:20) traded at BDT29,000/mt ex-Chattogram, flat from Friday.
Domestic billet prices were stable at BDT41,000/mt ex-works, these prices have remained flat for more than a month now. Amid weak domestic demand, most steelmakers expect steel prices to drop further in the coming days. Small scale producers offered rebar at BDT49,000-49,500/mt ex-works while medium-scale mills sold rebar at BDT50,000-50,500/mt ex-yards.
($1= PKR166.32; BDT84.8)