In recent conversations with market participants, SteelMint learned that towards last week close a leading steel mill has booked significant volumes of Shredded scrap in containers in Pakistan. Today the market has reopened after Eid holidays and a deal was learned in which around 12,000 MT of Shredded 211 was booked in containers from a leading supplier in UK at USD 380/MT, CFR port Qasim.
Last week after witnessing sharp currency devaluation local steel prices in Pakistan had moved up sharply and importers turned silent amid the closure of markets on holidays for religious festival during 15th-19th June.
Now participants are returning to the market after analyzing the effect of currency depreciation. PKR stood 120.8 against USD today which was trading at 119.5 on 14th June before moving toward holidays.
The price assessment for Shredded scrap from UK stood in the range of USD 380-385/MT, CFR Port Qasim, which remained stable on W-o-W basis. USA based sellers have turned firm on improving scrap prices in Turkey and offers for USA origin Shredded remained at around USD 385/MT, CFR Qasim.
“Scrap importers are likely to wait for 1-2 days more to analyse the global trends and likely to turn active then. Local steel prices are expected to move up than the levels those were before observing closing of the markets on account of Eid holidays” shared a source.
Offers for HMS 1&2 (80:20) scrap from UAE and South Africa heard at around USD 370/MT, CFR Qasim. HMS 1 from Dubai assessed stable at around USD 375/MT, CFR. HMS 1&2 (80:20) from UK/Europe origin is being offered at around USD 360/MT and African origin LMS scrap assessed at USD 335/MT, CFR. No bulk offers were heard.
Local steel markets yet to reopen in full swing – Local steel prices remain unchanged during Eid holidays. However, prices for rebar, billet and domestic scrap are expected to increase further.
“Although buyers are not desperate to purchase they would speed up restocking materials if they fetch desirable offers amid strong expectations and positive sentiments in the domestic steel markets” shared a market participant.
Average prices reported last on 14th June for local billet (Bala) were at around PKR 76,000-76,500/MT (USD 629-633) and grade 60 CC billet assessed at around PKR 81,500-82,000/MT (USD 675-680), ex-plant inclusive of taxes. Domestic scrap prices stood at around PKR 57,500/MT and Rebar prices assessed at PKR 94,000-95,000/MT (USD 778-786), ex-works in Punjab region inclusive of taxes.
On the other hand, ship cutting market at Gadani region witnessed declining sentiments again as the market remained marooned with no sale concluded last week. Sharp currency depreciation along with the sales tax imposed in a recent budget which will be effective after 1st July (another 5% negative impact on prices) compelled Pakistani buyers to remain sidelines in ship breaking since last few weeks.
Ship cutting prices assessed stable at USD 410/LDT for general dry bulk cargo; at USD 430/LDT for containers and USD 420/LDT for tankers on CNF Pakistan basis respectively.
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