Trade activities remain dull amid ongoing Ramadan festive season. Prices move down by USD 3-5/MT W-o-W.
As per recent conversations with market participants, SteelMint learned that scrap importers have remained inactive on the effect Ramadan festival holidays, continued heavy load shedding over electricity supply cuts to all the steel mills and extreme summer weather affecting working on factory floors in Pakistan.
Most of the participants remain in the ‘wait and watch’ mode with an expectation for price corrections in the global scrap market. The latest price assessment for USA HMS (80:20) remained at USD 348/MT, CFR Turkey. While few of the participants remain less working as they are under heavy pressure to pay the Utility and Electricity bills by this week.
The price assessment for Shredded scrap from UK/Europe and USA stood in the range of USD 385-388/MT, CFR Port Qasim. Few minor deals for HMS scrap were reported at corrected prices in the market although overall scrap demand remained sluggish this week. HMS (80:20) scrap from UAE and South Africa assessed in the range of USD 370-375/MT, CFR Qasim. Which fell marginally down by USD 3-5/MT on W-o-W basis. While no bulk offers heard.
Domestic steel prices show mix trends in last one weeks’ time – Domestic billet prices in Pakistan have moved up amid temporary shortage, low production on limited electricity supply and firm demand by PKR 500-1000/MT W-o-W this week. Current average prices for local billet (Bala) assessed at around PKR 74,500-75,000/MT (USD 644-648) and grade 60 CC billet assessed at around PKR 81,000-82,000/MT (USD 701-709), ex-plant inclusive of taxes. Rebar Grade 60 prices assessed stable at PKR 94,000-95,000/MT (USD 813-821), ex-works in Punjab region inclusive of taxes.
Pakistan average local steel reference prices as on today –
| Average Prices in PKR/MT, Ex-work Punjab, Pakistan inclusive of taxes | |||
| Commodity | Today (22/05/2018) | A week ago (15/05/2018) | Change W-o-W |
| Local Scrap | 55,500-56,000 | 56,500-57,000 | -1000 |
| Bala (Local Billet) | 74,500-75,000 | 74,000-74,500 | +500 |
| CC Billet (Grade 60) | 81,000-82,000 | 80,000-81,000 | +1000 |
| Rebar (Grade 60) | 94,000-95,000 | 94,000-95,000 | 0 |
Source: SteelMint Research
Electricity supply cuts affect daily production in Pakistan – Pakistan government has continued electricity supply cuts as energy demand has increased up to 20,000 megawatts per day during Ramadan. Presently all steel furnaces in the country are allowed to get electricity supply only for 12-14 hours per day as against 20 hours per day earlier thus this situation has led to sharp decline in finish steel production and steel prices to remain strong in the local market.
Few small-scale producers have shut down the mills on manpower shortage on Ramadan holidays, however, few producers eye towards producing maximum output in first 20 days of Ramadan in order to get the benefit of rates after holidays.
Ship breaking market at Gadani region witnessed steady sentiments. Sales continued again this week as Pakistan remained the highest paying market for ship cutting to sellers. Current prices assessed at USD 430/LDT for general dry bulk cargo; at USD 450/LDT for containers and at USD 440/LDT for tankers on CNF Pakistan basis. These prices have remained stable on W-o-W basis. A 16,544 LDT tanker sold last week at decent prices of USD 438/LDT, CNF Pakistan.
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