Buying remains subdued on volatility in Turkish scrap prices & upcoming Eid holidays.
In recent conversations with market participants SteelMint learned that, Pakistan steel market has crashed with local steel prices moved down sharply on W-o-W basis. Market is observing serious liquidity issues reflecting in sharp fall in local steel demand and prices. Also, market is likely to remain close during 22nd-26th August on account of EID festival holidays affecting restocking activities in the country.
Imported scrap prices move down USD 10-15/MT in recent deals – Global scrap prices have come down following huge currency depreciation in the largest scrap importer country, Turkey. Pakistan based scrap importers have booked few deals at corrected prices however, uncertainty about Turkey price levels kept buyers little hesitant as buying interest remains at slightly below levels. Sharply weakened local prices affected sentiments in imported market substantially.
In the recent deals concluded, European origin Shredded 211 scrap heard to have sold at USD 345-347/MT levels for prompt delivery. Offers for HMS 1&2 from South Africa heard at around USD 343-345/MT, CFR.
However, Offers for containerized Shredded scrap from yards in USA and UK remain in the range of USD 347-352/MT, CFR Qasim. HMS 1 from UAE assessed at around USD 342-345/MT, CFR Qasim.
Ship breaking market remains weak – According to reports, around 11 of the tankers beached earlier have re-inspected last week and expected to receive their fresh gas free certificates in order for recycling activities to commence and fresh negotiations on tonnage (wet or dry) subsequently resume. However, many of units are still untouched at yards waiting for gas free certificates to start cutting. Recovery in local demand needed to bring greater aggression in Ship cutting market. Prices remained weak again this week at USD 400/LDT for general dry bulk cargo, at USD 425/LDT for containers and at USD 415/LDT for tankers on CNF Pakistan basis respectively.
Local steel prices tumble down further sharply on weak demand – As an impact of weak demand and low cash circulation local billet, rebar and domestic scrap prices in Pakistan continued moving down since last couple of weeks. Local melting ferrous scrap prices have come down sharply and it remained cheaper over imported. For time being few steelmakers are preferring local scrap however, importers are likely to resume imported scrap purchases after EID holidays actively with improving steel market.
According to sources, average prices for local billet (Bala) stand at PKR 69,000/MT (USD 557) presently. Similarly for grade 60 CC billet prices gauged at PKR 75,000/MT (USD 605), ex-plant inclusive of taxes. Domestic scrap prices stands at PKR 47,000-48,000/MT (USD 379-387) levels now. While ship cutting plate prices assessed last at PKR 73,000/LDT.
Rebar prices in Punjab region are presently assessed at PKR 87,000-88,000/MT, ex-works and at PKR 91,000-92,000/MT levels ex works in Sindh region. All these prices are inclusive of taxes and have come down by PKR 5,000-6,000/MT.
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