SteelMint learned in recent conversation with participants that imported scrap offers have shown a downward correction on dull demand, however, limited trades are being reported as customers are holding back expecting a further correction in the near terms to resume buying in Pakistan.
SteelMint’s assessment for Shredded scrap inched down in the range USD 335-340/MT, CFR Qasim. Asking rates from leading yards in US and UK reported at around USD 340-345/MT, CFR but hardly any deal was reported for Shredded scrap amid no significant improvement in local steel demand yet. This has pulled assessment down USD 5-10/MT on weekly basis.
In a trade reported, Shredded scrap in containers sold at around USD 337/MT, CFR Qasim from UK and Europe. Containerized HMS 1 from Dubai was being reported at around USD 330/MT, CFR Qasim.
Middle East and South African origin HMS 1&2 offers stood stable at around USD 325-330/MT, CFR. Very limited inquiries heard for HMS scrap from other origins like UK and Europe this week.
Local steel market remains stagnant – Improvement in Bala billet prices was backed by an increase in electricity rates, however not significant increase has seen yet on thin demand. The market position remains more or less same as the last week and many of the plants are still working at limited capacities expecting few good developments would improve movement in the March month amid warming up weather.
Pakistan Government releases funds under the Ministry of Planning, Development and Reform – According to reports, the government has recently released PKR 319.31 billion including PKR 121.5 billion foreign aid, for different projects under Public Sector Development Program (PSDP) 2018-19 against total budgeted allocation of PKR 675 Billion including sectors like National Highway Authority, projects in railways, water resources etc.
Saudi Arabia promises to invest USD 20 Billion in Pakistan – In his recent visit, Saudi Prince Mohammed Bin Salman has promised to invest around USD 20 Billion over the next 5 years period. In which around USD 7 Billion are proposed for short term (1-2 years) investment under different sectors like RLNG plants, ACWA power and Saudi Fund for Pakistan.
Participants are hopeful about these developments which may bring some growth and turn in good development economically.
SteelMint’s local steel price assessment –
| Average Prices, Ex-work Punjab and Lahore, inclusive of taxes | |||
| Particular | 19-Feb’19 | Last assessment on 11-Feb’19 | Change |
| PKR/MT | PKR/MT | PKR | |
| Local Scrap (Equivalent to Shredded) | 58,500-59,000 | 58,500-59,000 | 0 |
| Bala (Local Billet) | 74,000-74,500 | 74,000-74,500 | 0 |
| CC Billet (Grade 40) | 80,000-80,500 | 80,000-80,500 | 0 |
| CC Billet (Grade 60) | 80,500-81,000 | 80,500-81,000 | 0 |
| Deformed bar (G-60) | 94,000-95,000 | 94,000-95,000 | 0 |
Source: SteelMint Research
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