Local Bala billet price in the northern region has jumped USD 28-35/MT in last two weeks’ time.
SteelMint learned in recent conversation with participants that Pakistan has observed improved buying for imported scrap following improving production activities and sales of finished steel in the local steel market.
SteelMint’s assessment for Shredded scrap has increased slightly in the range USD 335-340/MT, CFR Qasim, up USD 3-5/MT against last week’s report. In recent deals confirmed from traders’ end, containerized Shredded 211 sold comprising each of 1000 MT at USD 340/MT, CFR from UK/Europe and USD 335/MT, CFR from USA origin. While asking rates from the recyclers in UK and Europe are being quoted in the range USD 340-342/MT, CFR.
Offers for Middle East origin HMS 1 heard at around USD 330-333/MT, CFR. Limited deals for HMS 1 are being concluded at steady levels of USD 330/MT, CFR Qasim.
Local market observes a shortage of domestic scrap – Local steel market is observing a shortage of local scrap since last few weeks. On warming up of weather, many steel furnaces have turned operational and demand for scrap has been increased. Shortage of scrap particularly in Punjab region might have pushed steel bar and local scrap prices higher by PKR 1,500/MT that of last week. However, rebar prices in Southern region heard more or less stable at around PKR 97,500-98,500/MT, CFR against last week. Asking rates for steel bars G-60 are being quoted at around PKR 99,000-100,000/MT, ex- Karachi.
Reports added that a total around 12,000-15,000 MT of containerized imported scrap would have been booked in last one weeks’ time however a threat of further currency depreciation in upcoming days keep buyers hesitant to restock actively in large volume.
Melting margins improve sharply – SteelMint assessed local billet prices at PKR 79,500-80,000/MT, (USD 566-569) ex-works. Since the last 2 weeks’ time, local billet prices have moved up PKR 4,000-5,000/MT (USD 28-35) against an assessment done at PKR 75,000/MT (USD 535) on 12th Mar’19 on rising input energy costs and depreciated PKR. Increasing the price margin between imported scrap to Bala billet which stands at around USD 220-230/MT may support buyers for scrap imports.
PKR could depreciate further against USD – Pakistan Rupee has already hit a record low of 140.6 against USD and there are chances that PKR would be devalued to levels as high as 145-150 in the near future following liquidity issues. If PKR depreciates again then local prices may move up sharply and the local market will disturb for a while again, shared a source.
SteelMint’s local steel price assessment –
| Average Prices, Ex-work Punjab and Lahore, inclusive of taxes | |||
| Particular | 26-Mar’19 | Last assessment on 19-Mar’19 | Change |
| PKR/MT | PKR/MT | PKR | |
| Local Scrap (Equivalent to Shredded) | 61,000 | 59,500 | 1500 |
| Bala (Local Billet) | 79,500-80,000 | 77,000 | 2500-3000 |
| CC Billet (Grade 40) | 84,500 | 82,000 | 2500 |
| CC Billet (Grade 60) | 85,500 | 83,000 | 2500 |
| Deformed bar (G-60) Avg Selling Rates | 97,000-98,000 | 95,500-96,500 | 1500 |
Source: SteelMint Research
Gadani’s Shipbreaking market stands sidelines with a very few small LDT (about 1,000 LDT) vessels beached at Pakistan’s port last week. It stands with no competing factor against that of aggressive sub-continent markets. Participants anticipate that it may take a couple of months’ time for Pakistan to turn back into ship recycling market again. SteelMint’s ship breaking assessment stands at USD 430/LT LDT for containers and USD 420/LT LDT for Tankers.
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