With the decline in bulk ferrous scrap bookings in Turkey and a drop in iron ore prices in China late last week, containerized ferrous scrap importers in Pakistan lowered their bids. Buyers have started to resist higher offers since last week. After the Muharram holidays, importers resumed trades but lowered bids by upto $10/mt from earlier levels.
The daily Davis Index for containerized shredded on Monday tumbled by $9/mt to $530/mt cfr Qasim. Asian steel market sentiments have soured following a sharp correction in spot iron ore prices in the Chinese market led by production cuts and slower economic growth in China.
Trades for containerized shredded were reported at $530/mt cfr Qasim, albeit in smaller quantities than usual. On Monday, a few buyers were interested to book shredded at $525-530/mt cfr Qasim but sellers decided to hold on to the material.
Following softening domestic scrap prices, Turkish mills lowered bids for imported scrap. In the bulk market, trades were reported at $450/mt cfr Turkey for HMS 1&2 (80:20). The daily index dropped to $449.85/mt cfr Turkey, down $5.03/mt.
Lowered demand for HMS is India weighed on the UAE origin ferrous scrap offers. The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled at $491/mt cfr port Qasim, down $4/mt from Friday. Trades for UAE-origin mixed #1 HMS and P&S dropped below $505/mt cfr Port Qasim.
The daily index for US-origin HMS 1&2 (80:20) settled at $490/mt cfr Port Qasim on Monday, down $3.75/mt from Friday. Falling global ferrous scrap prices on easing availability amid subdued demand for long transit materials in South Asia pressured prices down. Yet, domestic demand for ferrous scrap in the US was still comparatively better driven by a hike in steel prices, with HRC above $1,950/st.
In Pakistan’s domestic market, there was very limited activity on Monday. Domestic Bala billet prices were flat at PKR140,000/mt ex-works. For Art Q toke scrap (equivalent to a mix of HMS and P&S) and Pure Q toke scrap (equivalent to shredded) prices remained unchanged at PKR108,000/mt and PKR110,500/mt ex-yard Lahore, respectively, amid tight supply and elevated steel prices.
Domestic steel prices, however, jumped by PKR6,000/mt ($33/mt) to absorb the impact of currency depreciation and changes in sale taxes. Offers for rebar from large-scale producers were at PKR173,500/mt ex-works Karachi, while local rebar traded at PKR160,000/mt following limited construction projects.
Pakistani currency depreciated scaling a new low to PKR164.43 against the US dollar on Monday.