SteelMint learned in recent conversation with market participants that Pakistan market remained silent for imported scrap bookings on year-end lull and bearish outlook of global markets. Despite limited inventories in hand buyers are waiting before making new purchases. With the news of pick up in activities of CPEC and many other development projects in the next couple of weeks, steel demand is expected to turn stable towards mid of Jan’19.
Imported scrap offers come to standstill position with international scrap yards and most of the suppliers standing out of the market. Shredded scrap remains under pressure as offers heard in the range USD 320-325/MT, CFR Qasim. Traders’ asking rates heard at around USD 325-328/MT, CFR. Sellers are willing to negotiate further however buyers stand away from bookings.
Minor trades for containerized shredded scrap was concluded in the range USD 322-325/MT, CFR Qasim during the closing of last week.
Dubai origin HMS 1 heard booked at around USD 323-325/MT, CFR last week but asking rates of HMS 1 stand in the range USD 325-327/MT, CFR Qasim.
Shortage of local scrap increases further – Local scrap prices rebounded back gradually at earlier levels after falling sharply last week. Supply remains tight and local scrap equivalent to Shredded stands at around PKR 56,500-57,000/MT (USD 406-409) including local taxes.
Sentiments in Pakistan’s local steel market improve – Pakistan’s local steel prices have observed a sharp jump amid short supply. Local billet (Bala) prices shot up to levels of PKR 75,000/MT (USD 539) today. While deformed G-60 bar prices heard in the range PKR 100,000-102,000/MT, ex-Karachi inclusive of taxes.
“Local sales are picking up due to a supply shortage. Many of the furnaces and rerolling have shut down and many steelmakers are operating only at 30-40% of their capacity as it is not viable to operate at these price levels.” – shared a source.
CPEC envisages several new projects – After agreement to enhance cooperation under China Pakistan Economic Corridor (CPEC) in between China and Pakistan, the committee has decided to build several projects besides establishing a special economic zone (SEZ) near Gilgit under the multibillion-dollar project. Which includes two hydropower projects (100 MW and 80 MW each), a medical college, a woman university and a logistics hub. China is likely to grant 300 Million dollars in the first phase for these projects.
SteelMint’s local steel price assessment –
| Average Prices, Ex-work Punjab and Lahore, inclusive of taxes | |||
| Particular | 26-Dec’18 | Last assessment on 17-Dec’18 | Change |
| PKR/MT | PKR/MT | PKR | |
| Local Scrap (Equivalent to Shredded) | 56,500-57,000 | 52,500 | 4000-4500 |
| Bala (Local Billet) | 74,500-75,000 | 70,000 | 4500-5000 |
| CC Billet (Grade 40) | 80,500-81,500 | 77,000-78,000 | 3500 |
| CC Billet (Grade 60) | 82,000-83,000 | 78,500-79,500 | 3500 |
| Deformed bar (G-60) | 97,000-99,000 | 96,000-98,000 | 1000 |
Source: SteelMint Research, USD/PKR = 139
Ship breaking market remains quiet – Gadani market has truly failed to come back into the market after an accident on the tanker. Amid liquidity issues and depreciation of currency it fell down to lowest placed in Indian subcontinent market and despite plenty of units proposed for sale, it continues to miss out tonnages for yet another week. Ship breaking price assessment reported at around USD 405/LT for dry bulk cargo, at USD 425/LT for containers and USD 415/LT for tankers.
Leave a Reply