Pakistani mills resumed inquiries for imported scrap as offers turned around and moved up further on global cues. Most participants believe prices have bottomed out and may rise in the coming days. Yet, trades were limited as suppliers hope Chinese demand will push prices and boost steel demand, globally, post the New Year holidays. Amid tight supply and high freight rates, yards expect prices should rise by another $20-30/mt by the end of February. While some mills showed a willingness to accept higher offers.
The daily Davis Index for containerized shredded, Wednesday, inched up by $3.75/mt to $400/mt cfr Port Qasim. Most suppliers offered containerized shredded on Wednesday at $405-410/mt cfr Port Qasim. A deal for shredded heard at $398/mt cfr Qasim on Tuesday, up $5/mt from the prior deal.
The daily index for US-origin HMS 1&2 (80:20) settled at $370/mt cfr Port Qasim, up by $1.07/mt. Freight prices on the New York-Pakistan have increased by $10/mt for TEUs. The market had few takers for US and Australian-origin HMS scrap at higher prices. There is a wide disparity between South Asian mills’ expected scrap price and global levels.
The UAE origin HMS is trading $20/mt lower than other origins and is most viable import option, said traders. Trades for #1 HMS and P&S of UAE-origin heard at $375-380/mt cfr Port Qasim, depending on quality. The daily Davis Index for UAE-origin HMS 1&2 (80:20), Wednesday, rose by $3/mt to $368/mt cfr Port Qasim. UAE-based sellers refused to lower offers and hope prices would rebound once Turkish mills resume bulk trades.
A few importers prompted by a $13-15/mt jump in Chinese iron ore and HRC prices from early February are likely to accept high scrap offers.
Domestic steel sales still slow
Domestic steel sales in Pakistan remain subdued, however, should the availability of domestic scrap turn tight, buyers would resume trades for imported scrap again. For shipbreakers, scrapped vessels were offered at prices down $20-25/mt from the prior week.
In Lahore, G-60 billet traded at PKR103,000-105,000/mt ex-works. Prices for Bala billet heard at PKR95,000-96,000/mt ex-works. Offers for Art Pure Q toke scrap equivalent to a mix of HMS and P&S at PKR76,500-77,500/mt ex-yard Lahore stable from Monday.