In recent conversations with market participants, SteelMint learned that imported scrap market in Pakistan has improved observing deals reported this week. Prices remained mostly stable following steady sentiments in the global markets however local steel market remained less supportive at the moment.
Uncertainties about hike in electricity power tariffs are likely to finalize with an announcement from the government in next couple of days. However, new electricity rates are yet to increase which keeps market little stagnant in Pakistan.
Containerized Shredded 211 from Europe and UK origin traded in couple of deals in the range of USD 354-358/MT, CFR Qasim. However, offers from leading supplying yards in USA heard at around USD 360/MT, CFR Qasim.
HMS 1 scrap from Dubai was traded at around USD 342-345/MT, CFR Qasim, slightly down against the report of USD 345-350/MT last week. On limited inventories in hand buying of imported scrap likely to continue at global price levels in upcoming days.
Local steel price assessment as on 23th Oct’18 –
| Average Prices, Ex-work Punjab and Lahore, inclusive of taxes | ||||
| Particular | 23rd Oct’18 | Last assessment on 16th Oct’18 | W-o-W Change | |
| PKR/MT | USD/MT | PKR/MT | PKR | |
| Local Scrap (Equivalent to Shredded) | 61,500 | 460 | 60,000 | 1500 |
| Bala (Local Billet) | 81,000 | 605 | 80,000 | 1000 |
| CC Billet (Grade 40) | 86,500 | 647 | 86,000 | 500 |
| CC Billet (Grade 60) | 88,000 | 658 | 88,000 | 0 |
| Deformed bar (G-60) | 100,000-101,000 | 748-755 | 100,000-101,000 | 0 |
Source: SteelMint Research, USD/PKR = 133.7
Local steel market witnesses slow improvement – According to sources, domestic steel market is gradually improving however in very slow pace. Uncertainty of increase in electricity rates and non-recovery of pending payments of contractors and rebar suppliers keep steel demand unstable in the local market.
Currently many of the tax free zones in the country have an advantage of selling products at lower prices as compared to existing market rates. These areas including FATA (Federally Administered Tribal Area), PATA (Provincially Administered Tribal Area) and Dargai (Administrative Area of Malakand District) are not paying taxes causing a big threat for steel industry which has to pay taxes for the same.
Major steelmakers in Karachi observe rebar prices little higher side than other regions of the country. Deformed G-60 prices heard at PKR 105,000-106,000/MT and Deformed G-60 A-706 and E-bar prices assessed at PKR 107,000-108,000/MT, ex-works in Karachi inclusive of taxes.
Deformed rebar prices in Punjab region were assessed at PKR 100,000-101,000/MT, ex-works and at PKR 105,000-106,000/MT levels in Sindh region. All these prices are inclusive of taxes. Domestic availability of scrap remained tight pushing its prices further up this week.
Ship breaking market uncertain after accident at Gadani port – After another accident reported on a tanker being recycled in Gadani, the market turned uncertain with an anxiety of lengthy closures to be witnessed again. However, couple of Capesize bulker sales from Korean owners were reported comprising of 18,223 LDT and 19,950 LDT at decent price of USD 467/LT LDT as the market starts to wake up in Gadani. Local recyclers remain anxious and waiting for permission against currently imposed cutting ban on tankers.
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