SteelMint learned in conversation with industry participants that imported scrap activities in Pakistan have been slowed down after witnessing decent bookings in earlier weeks. Inquiries for imported scrap remained limited amid weak demand in the local market. Participants were waiting for major initiatives from the Government in order to fix current tax-related and liquidity issues in the market.
SteelMint’s assessment for containerized Shredded scrap stands at USD 330-332/MT, CFR Qasim, almost stable against last week’s report. Asking rates from few recyclers in UK and Europe is being quoted at around USD 332-335/MT, CFR. Very limited offers were available in the market as global sentiments remained negative for imported scrap at the moment.
UAE origin HMS scrap offers increase – According to sources, following increased supply tightness and improved demand from Indian subcontinental markets, few suppliers are quoting Dubai HMS 1 as high as USD 335-340/MT, CFR depending on quality. Last week few deals for Middle East origin HMS 1 was concluded at USD 330-335/MT, CFR. While HMS 1&2 from Dubai in containers concluded at USD 322-323/MT, CFR Qasim.
Local steel prices turned down on low demand and liquidity issues – Local steel prices move down marginally this week as the market started cooling off amid most of the buyers encountering liquidity issues. Buyers were looking to buy on credit basis, on the other hand, steelmakers continued to avoid the same.
“Presently, buyers are asking for lower prices and sellers not reducing offers so there is a standoff in the domestic market, demand remains low while supply is still slightly high pulling prices down.” Shared a source.
Pakistan Steel Melters Association has recently issued the resolution for ‘not to pay withholding tax’ in order to highlight the Government to take positive initiatives regarding the steel industry’s tax-related issues. According to it, no withholding tax to be paid to the owners of the scrap godowns, (Billets/Ms Products) with effect from 15th April’19.
Today’s USD/PKR exchange rate stands at 141.6 almost the same as one week ago.
SteelMint’s assessment of local billet stands at PKR 79,000-80,000/MT (USD 558-565) ex-works. Rebar prices in Northern region reported at around PKR 97,000-98,000/MT that of Southern at PKR 98,000-99,000/MT, ex-works respectively. Asking rates for steel bars G-60 heard at around PKR 100,000/MT, ex- Karachi inclusive of local taxes.
Shortage of domestic scrap continues in the market and local scrap equivalent to Shredded is being reported at PKR 61,500-62,000/MT (USD 434-438), ex-works inclusive of taxes, down sharply by PKR 1,000/MT (USD 7) on W-o-W basis.
SteelMint’s local steel price assessment –
| Average Prices, Ex-work Punjab and Lahore, inclusive of taxes | |||
| Particular | 16-Apr’19 | Last assessment on 08-Apr’19 | Change |
| PKR/MT | PKR/MT | PKR | |
| Local Scrap (Equivalent to Shredded) | 61,500 | 62,500 | -1,000 |
| Bala (Local Billet) | 79,000-79,500 | 81,000-81,500 | -2,000 |
| CC Billet (Grade 40) | 83,500-84,000 | 85,000-85,500 | -1,500 |
| CC Billet (Grade 60) | 84,500-85,000 | 85,500-86,000 | -1,000 |
| Deformed bar (G-60) | 97,000-98,000 | 97,500-98,500 | -500 |
Source: SteelMint Research
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