Imported ferrous scrap prices in Pakistan scaled four months high in recent trades. The government has announced national holidays from May 10-15 while market participants expect trading to remain suspended from Sunday, May 9 to Monday, May 17. The country is also observing stringent restrictions on the movement of people and goods amid a resurgence of COVID-19, but steel production is unimpacted.
Few traders are optimistic of bookings next week as depleting inventories could force buyers to secure scrap despite the Eid holidays.
The daily Davis Index for containerized shredded, Friday, settled at $490/mt cfr Port Qasim, up by $2.5/mt from Thursday. Trades for over 10,000mt of shredded in containers heard in the range of $480-490/mt cfr Qasim this week.
From last Thursday, the index rose by $22.05/mt. On Friday, offers from the UK/EU origin rose to hit $495-500/mt cfr Qasim although mills have slowed purchases ahead of Eid holidays. As demand outpaces the supply of ferrous scrap, globally, prices jumped both in the containers and bulk markets.
In Turkey, demand for ferrous scrap turned active in the bulks encouraged by bullish global steel prices. Market participants expect this trend to continue for another couple of weeks. The daily index for bulk US-origin HMS 1&2 (80:20), Thursday, rose to $482.7/mt cfr Turkey, up over $50/mt from the prior Thursday.
The daily index for US-origin HMS 1&2 (80:20), Friday, gained $2.5/mt to $465/mt cfr Port Qasim. Offers jumped by $20-25/mt in a week scaling four months high. Most US suppliers are focusing on domestic demand amid strong settlement prices in May and persisting logistics challenges in seaborne trade.
The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled at $465/mt cfr Port Qasim, up by $3/mt. From last Friday, the index increased by $17/mt. Importers booked UAE-origin mixed #1 HMS and P&S in containers at $475/mt cfr Qasim pushing offers to $480/mt cfr Qasim on Friday amid increasing demand from Indian mills. UAE-based traders are hopeful of more deals in the coming days supported by a pick-up in steel demand post-Eid.
The Davis Index for P&S 5ft was up by $22/mt to $502/mt cfr Port Qasim; while that for busheling settled at $522/mt cfr Port Qasim, up by $19/mt from prior Thursday. Supply for prime grades remained tight resulting in few trades this week.
Billet prices rise
In the domestic market, Bala billet traded at PKR111,000-111,500/mt ex-works Lahore. On a weekly basis, the index for domestic Bala billet rose by PKR1,000/mt to PKR111,500/mt ($733/mt) ex-works. Offers for G-60 billet were at PKR116,000-117,000/mt ex-works Punjab on Friday. The weekly Davis Index for G-60 billet rose by PKR1,000/mt to PKR116,000/mt ex-works Punjab.
The weekly Davis Indexes for rebar climbed to PKR136,000/mt ex-works Karachi and PKR132,250/mt ex-works Punjab, up by PKR500/mt and PKR250/mt, respectively. Local rebar sold at PKR121,000-122,000/mt ex-works Punjab. Amid rising raw materials prices and high input costs, most large steelmakers in Punjab and Karachi decided to lift the asking prices for rebar. Mills are optimistic of steel demand post-Eid.
With global HRC offers increasing, Pakistani flat steel producers announced price hikes. CRC was offered at an all-time high of above PKR200,000/mt ex-works. While Chinese HRC traded at $1,000/mt cfr Pakistan.
Domestic scrap inch up
Driven by high imported scrap offers, the weekly index for Art Q toke scrap equivalent to a mix of HMS and P&S, Friday, settled at PKR90,500/mt ex-yard Lahore, up PKR500/mt.
Pure Q toke scrap (equivalent to shredded) prices rose to PKR91,300-91,500/mt ex-yard Lahore. The weekly index for the grade settled at PKR91,450/mt ex-yards, up PKR200/mt. Higher imported ferrous scrap prices are expected to lift the price and demand for domestic scrap.