Pakistani steel mills resumed inquiries for shredded after focusing on HMS bookings for a couple of weeks. A widened gap between the prices for shredded and HMS made mills opt for the latter.
Small-scale mills continued to postpone purchases on fears of the delta variant of the virus spreading a new wave of COVID-19 infections. Heavy monsoon rains have also hampered logistics in some parts of the country.
Global cues strengthened with a resumption in Turkish bulk deals at marginally higher prices. Although demand has improved, it remains slower than expected.
On July 1, Pakistan had declared a bank holiday as the new financial year began. Trading, therefore, was largely halted in the domestic market.
The daily Davis Index for containerized shredded, Thursday, was at $539.71/mt cfr Port Qasim, up by $3.46/mt. Deals for EU/UK-origin shredded were reported at $537-540/mt cfr Port Qasim. Sellers kept asking prices above $540-545/mt cfr following strong cues in the US domestic market for July monthly settlements. Unavailability of material also kept them bullish despite buyers shying away from the present offer levels.
Amid stable demand and increased inquiries, UAE sellers lifted offers again. Although rebar prices in the UAE declined on weak construction demand, sellers were unwilling to lower offers in export markets. The Davis Index for UAE-origin HMS 1&2 (80:20), Thursday, settled at $487/mt cfr Port Qasim. Deals for UAE-origin mixed #1 HMS and P&S were at $495-500/mt cfr Port Qasim. Some sellers even offered material at prices above $500/mt cfr Qasim on Thursday.
The index for US-origin HMS 1&2 (80:20), Thursday, settled at $499.79/mt cfr Port Qasim, up by $2.29/mt from Wednesday. Container freight rates remained elevated resulting in increased landed costs. HRC prices in the US market rose above $1850/nt ex-works scaling new record levels.
In Turkey, a couple of bulk cargoes were reportedly sold at higher prices as mills resume August shipments. The daily Davis Index for imports of US-origin HMS 1&2 (80:20) was at $500.83/mt cfr Turkey on Wednesday, up by $1.31/mt.
Domestic steel prices remained flat after rising following high raw material import costs. On tight supply and the resulting rise in ferrous scrap offers, major rebar producers mills mull another price hike for rebar. A gap between steel prices in the global market and Pakistan could also support steelmakers to raise offers. Trades improved at asking rates of PKR150,500/mt ex-works Karachi and PKR149,000-149,500/mt ex-works Punjab.
Domestic Bala billet prices have stayed on an uptrend since the week started. On Thursday, deals were reported at PKR120,000-120,500/mt ex-works, up PKR500/mt from the day prior. Offers for G-60 billet were at PKR125,500-126,000/mt ex-works Punjab.
Amid firm imported scrap offers and tight domestic supply, the prices for Art Q toke scrap (equivalent to a mix of HMS and P&S) and Pure Q toke scrap (equivalent to shredded) Thursday rose PKR500/mt to PKR96,000-96,300/mt and PKR97,500-97,800/mt ex-yard Lahore, respectively.
($1=PKR158.03)