South Asian markets remained in lockdown with concerns surrounding end-user demand deepening. Steelmakers have currently scaled-down production and hence, demand for imported scrap remains subdued. However, a short supply of scrap kept the prices on an upward curve. While Bangladesh saw limited trades, India and Pakistan stayed away from any major purchases.
Bangladesh’s major steel mills continued operations. If the rising COVID-19, cases, however, do not come under control, shutting down is likely to be inevitable.
All small- and medium-scale steelmakers and re-rollers have already shut operations in Dhaka and Chattogram, shared a source. Both supply and demand remain weak. There was no major bulk booking for ferrous scrap this week.
In the container market, the Davis Index for containerised shredded scrap settled at $255/mt cfr Chattogram on Thursday, up from $243/mt from the prior week. Early this week, thin trades for containerised shredded were at $245-250/mt cfr Chattogram, though offers then increased to $260/mt cfr Chattogram.
The Davis Index for containerised P&S settled at $260/mt cfr Chattogram, up by $10/mt from the prior week. The Davis Index for US-origin containerised HMS 1&2 (80:20) rose to $240/mt cfr Chattogram, from $235/ mt the prior week. The Davis Index for Australian HMS 1&2 (80:20) settled at $251/mt cfr Chattogram, up by $15/mt from the prior week. The Davis Index for Latin American HMS 1&2 (80:20) settled at $250/mt cfr Chattogram, up by $15/mt from the prior week. Brazilian traders raised their offers to $255-260/mt cfr Chattogram.
Bangladesh domestic market
Major steelmakers incurred heavy losses amid the COVID-19 and resulting shutdowns. Demand for finished steel products remained stagnated due to infrastructural projects in the country going on hold. A ban on shipbreaking activity has created a shortage of ferrous scrap domestically.
The Davis Index for domestic ship-breaking HMS 1&2 (80:20) settled at BDT28,000/mt inclusive of local taxes ex-yard Chattogram, down by BDT250/mt ($3/mt) from the prior week. The Davis Index for domestic shipbreaking P&S settled at BDT28,500/mt ex-yard, down by BDT250/mt ($3/mt) from the prior week. Prices dropped as the demand has been subdued and stocks at yards remained high.
The Davis Index for rebar from large steelmakers settled at BDT59,000/mt ex-producer, up BDT250/mt ex-producer the prior week.
Pakistan steel production came to a halt amid a national lockdown announced till April 14. With insufficient offers in the markets, importers were struggling to find suppliers. Domestic steel prices remained flat while scrap prices rose driven by supply crunch. Limited trades were reported in the market.
Pakistan ports have waived demurrage charges by extending the free period by five days for all shipments scheduled between March 26 to April 15. The Pakistan government has released a PKR1 trillion stimulus package to the industry to deal with the fallout of the COVID-19 pandemic.
The weekly Davis Index for containerised shredded increased by $15/mt to settle at $251/mt cfr Port Qasim on Thursday. Early this week, trades for containerised shredded concluded at $245-250/mt cfr Qasim. In the late week, shredded trades also concluded at $255-260/mt cfr Qasim, according to a trader. Imported scrap prices, after dropping to a three- month low, rebound this week.
The Davis Index for Dubai-origin #1 HMS settled at $263/mt cfr Port Qasim, up by $10/mt from the prior week. Offers for a mix of #1 HMS and P&S were at $260-265/mt cfr Qasim, with no takers at those levels. The Davis Index for P&S settled at $258/mt cfr Port Qasim, up by $10/ mt from the prior week.
The index for busheling settled at $275/mt cfr Port Qasim, up by $12/mt from the prior week. Containerised HMS 1&2 (80:20) from the UK and US was offered at $240-250/mt cfr Port Qasim, up by $10/mt from the prior week. Scrap supply remains tight due to low generation rate and logistics issues arising out of lockdowns across the world.
Pakistan’s domestic steel market at a standstill
With almost all major steelmakers in Karachi and Punjab having shut operations, there was no movement of billet and rebar in the country.
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.