Imported scrap prices in Pakistan dropped significantly in bookings concluded yesterday. As traders returned to the market after the Muharram Ashura holidays, sentiments turned bearish as major mills held back from concluding deals in expectation of a further drop in offers.
Factors leading to drop in offers
- Plunge in global iron ore prices: Global iron ore prices have dropped as China’s spot iron ore prices edged lower on bearish sentiments. Spot prices of the benchmark iron ore Fe 62% fines fell by $2.6/tonne (t) to $136.50/t CFR China on 24 Aug’21. The Fe 62% fines index dropped from $162.5/t, CNF China towards the beginning of last week to $139.10/t, CNF China by the weekend. Bearish sentiments in the Chinese steel market, a weak demand outlook, and falling iron ore futures have collectively dragged spot prices down.
- Weaker sentiments in Turkey’s imported scrap market: Turkey’s imported scrap trade remained absent this week, as compared to the limited deals reported in the previous week. SteelMint’s assessment for US-origin HMS 1&2 (80:20) stands at $452/tonne (t) CFR Turkey, down significantly by $6/tonne (t) w-o-w.
- Flurry of offers from recyclers: After shredded offers in Pakistan hit $540-545/t CFR levels last week, many recyclers turned aggressive in Pakistan. However, mis-match in demand-supply resulted in lowering of offers, SteelMint understands.
“Buyers’ expectations remain low this week. The market may possibly change next week. The European market is under pressure as no deals happened due to the Muharram holidays. Buyers wanted to take advantage of that and bid at low levels,” a local source informed.
Fresh offers and deals
- A recent deal for around 4,000- 5,000 t of shredded in containers was concluded at $525-530/t CFR Qasim levels in the last two three days.
- Fresh offers were reported at around $520-525/t CFR levels. Offers dropped significantly by $20-25/t.
- Another deal was heard booked for around 1,000 t of shredded at $515/t CFR levels. However, confirmation was not received till the time of publishing this report.
- UAE-origin HMS1/PNS is being offered at $505-510/t CFR levels but no confirmed deals were reported.
Domestic steel prices inch up: Domestic steel prices have improved as compared to last week. Major mills were asking for higher prices but booking at much lower rates to cover maximum share in the market because finished steel demand is weak due to this being the Muharram month and rainy season. Local scrap is still available at PKR 105,000-110,000/t exy Punjab levels, unchanged against w-o-w.
Major mills’ rebar prices are being offered at PKR 171,000-172,000/t exy-Punjab, while rebar is being traded at PKR 165,000-170,000/t exy-Punjab after trade discounts, sources informed.
SteelMint’s price assessments of Pakistan market – 24 Aug’21
Source: SteelMint
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