Pakistani mills raised inquiries for imported ferrous scrap, but bookings were very few as buyers awaited clarity on global cues. Most traders expect trading to improve in the next two days. There is a possibility of another round of freight hikes by major shipping lines globally in early August. The speculations over a probable change in the export tax on steel by the Chinese government boosted sentiment.
The depreciation of Pakistani currency could raise steel prices at levels higher than those in the pre-Eid period. The Pakistani rupee was at PKR161.66 on Tuesday against $1 from 160.8 last week.
The daily Davis Index for containerized shredded remained unchanged at $545/mt cfr Port Qasim on Tuesday. Most offers were at $545-550/mt cfr Qasim.
Expectations of a recovery in Turkish bulk demand for new shipments also boosted buying appetite in Pakistan. Turkish rebar export offers opened flat at around $730-740/mt fob levels after the Eid holidays. The index for US-origin HMS 1&2 (80:20) index too remained flat at $485/mt cfr Turkey.
Sellers from the UAE kept their offers firm. The daily Davis Index for UAE-origin HMS 1&2 (80:20) was at $503/mt cfr port Qasim, up by $2/mt. Expectations for UAE-origin mixed #1 HMS and P&S remained unchanged at $510-515/mt cfr Port Qasim.
The extended suspension on steel scrap and wastepaper exports from the UAE for another five months till December 14, 2021, is unlikely to have an impact on supplies, said a trader.
The daily index for US-origin HMS 1&2 (80:20) settled at $505/mt cfr Port Qasim on Friday, up by $2.5/mt. Pakistan could emerge as a favorable market this week as COVID-19 related lockdowns in East and Southeast Asia kept ferrous scrap demand muted in the region.
Fresh offers for rebar and billets were very few, as activity is slowly gathering pace after the Eid holidays. But expectations from sellers were firm following an increase in input costs and a depreciation of the Pakistani currency.
In the domestic market, rising COVID-19 cases affected transportation and economic activities in Sindh, while rains in some regions suspended steel sales.
A supply crunch and a rise in ship dismantling costs kept domestic ferrous scrap prices elevated. Offers for scrapped vessels were at $580-590/ldt cnf Qasim amid an improvement in buying sentiment.
($1=PKR161.66)