SteelMint learned in recent conversation with market participants that imported scrap trades in Pakistan remain on hold amid dull domestic market. Local finish steel demand remains very low considering dampening construction activities in both private and public sector projects. Government put up the ban on construction of high-rise structure in the metropolis impacting layoffs of thousands of workers and closure of few steel mills in the country.
Containerized Shredded 211 from Europe and UK heard in the range of USD 355-358/MT, CFR Qasim, down as against USD 4-5/MT W-o-W. While few leading recyclers are still quoting Shredded in the range of USD 358-363/MT, CFR.
Offers for Dubai origin HMS 1 heard at around USD 340/MT, CFR Qasim, up slightly on W-o-W basis. However, South African HMS 1&2 assessment remains still at around USD 347-350/MT, CFR Qasim.
Re-rolling mills observe closure to keep steel prices supported – Following sharp fall in finish steel demand, around 70-80 rerolling mills in Sindh and Balochistan have observed closure for 10 days. According to sources, steel mills have closed down production in order to maintain rebar prices supported otherwise which would have come down by around PKR 4,000/MT in Pakistan. Apart from a ban on sky high construction, smuggling of cheaper Iranian rebar into these markets hit re-rollers operation in the country.
Local steel price assessment as on 13th Nov’18 –
| Average Prices, Ex-work Punjab and Lahore, inclusive of taxes | ||||
| Particular | 12-Nov’18 | Last assessment on 5th Nov’18 | W-o-W Change | |
| PKR/MT | USD/MT | PKR/MT | PKR | |
| Local Scrap (Equivalent to Shredded) | 57,500 | 432 | 58,000 | -500 |
| Bala (Local Billet) | 76,000 | 571 | 77,000 | -1000 |
| CC Billet (Grade 40) | 82,000 | 617 | 83,000 | -1000 |
| CC Billet (Grade 60) | 83,500 | 628 | 84,500 | -1000 |
| Deformed bar (G-60) | 100,000-101,000 | 752-759 | 100,000-101,000 | 0 |
Source: SteelMint Research, USD/PKR = 133.02
On the other hand, FATA, PATA and Dargai Steel is still available at cheaper rates in some other regions of the country. Government policies are not much supportive for the steel industry for time being and funds are not fully issued causing liquidity crunch in the market.
However, many of the participants expect for good demand over an announcement of housing scheme by the government and the construction of dam which is likely to boost steel consumption in the medium term.
Rebar prices remain stable amid limited trades – In Punjab region, deformed rebar assessed in the range PKR 100,000-101,000/MT, ex-works. While in Sindh region at PKR 103,000-104,000/MT, ex-works. Deformed premium G-60 rebar prices heard in the range of PKR 104,000-106,000/MT, ex-Karachi while local deformed bar assessed stable at PKR 103,000/MT, ex-works in Southern region. All these prices are inclusive of taxes.
Domestic scrap prices equivalent to Shredded observed further softening by PKR 500/MT W-o-W.
Ship breaking market remains uncompetitive on lack of domestic support – According to reports, Gadani based buyers remained hesitant to commit on wet purchases. Despite Pakistani Rupee has been relatively stable over past couple of weeks, declining local steel plate prices has further hampered sentiments on lack of local motivation. Local ship plate prices assessed at PKR 76,000/MT down PKR 1000/MT as against the last report. Ship breaking prices have been reported stable at USD 430/LT for dry bulk cargo, at USD 450/LT for containers and USD 440/LT for tankers.
Leave a Reply