Trades for imported ferrous scrap from Pakistan remained very limited as buyers decided to wait for prices to settle before they resume booking. Many supplier yards showed resistance to the sharp drop but have lowered their offers by a small quantum. Pakistan’s domestic steel prices continued to dip in line with lower imported scrap prices.
The daily Davis Index for containerized shredded, Wednesday, settled at $445/mt cfr Port Qasim, down $15/mt from Tuesday. Prices have dropped around $25/mt in last two days as most buyers moved sideways. Trades for shredded in containers of UK/EU-origin concluded at $440-445/mt cfr Qasim on Tuesday with a few indications of $430-435/mt cfr Qasim as the new level.
Most yards, however, did not accept lower bids, citing that the drop could be temporary as scrap generation is limited and freight rates are high on container shortage. Chinese buyers are expected to resume scrap imports for higher grades offering support to falling prices.
The daily index for US-origin HMS 1&2 (80:20) settled at $415/mt cfr Port Qasim, down $15/mt from Tuesday in the absence of major deals. In Turkey, bulk prices have come under pressure as mills extended their silence. The next round of negotiations could open below $440-445/mt cfr Turkey, claimed a trader.
“There is panic in the market, a few yards in the UAE with ample supply are offering $380-390/mt cfr Qasim for mix P&S grade which was above $450/mt cfr Qasim just a week earlier. Such a dramatic drop of $60-70/mt has induced bearish sentiment,” said a trader.
Suppliers from the UAE offered #1 HMS and PNS at $400-415/mt cfr Port Qasim on Wednesday depending on quality. The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled at $411/mt cfr Port Qasim down $17/mt from Tuesday. Pakistani mills are also waiting for another $10-15/mt drop while Indian mills expect prices to drop below $375-380/mt cfr Nhava Sheva.
Trades for steel remain slow
Pakistani mills offered attractive discounts on steel products to stimulate sales. Domestic Bala billet offered at PKR95,000/mt ex-works Lahore, down PKR1,000/mt ($6.22/mt) from Tuesday. In Karachi, too, major rebar makers offered discounts. Mills in the South witnessed slow trades for G-60 rebar 12-32mm at above PKR135,000/mt ($840/mt) ex-works while trades for local rebar heard at PKR113,000-114,000/mt ex works.
Domestic scrap continues to fall
On Wednesday, local Art Q toke scrap equivalent to a mix of HMS and P&S offered at PKR75,000-76,000/mt ex-works Lahore, down by another PKR1,000/mt from Tuesday. Pure Q Toke (shredded) traded at PKR79,000-80,000/mt ex-yards, down PKR1,000/mt from Tuesday. As the gap between G-60 rebar and local rebar increased above the usual of PKR10,000/mt, traders anticipate large mills to cut steel prices in the next few days.