With work on mega infrastructure projects gradually resuming, steel demand and prices in the country are likely to improve in the coming days. Trading on Tuesday, however, was thin despite a positive sentiment ruling the market.
But in the hopes of a stronger market, Pakistani mills could pay higher than other buyers in the subcontinent. This, also because a shortage of material has supported suppliers to raise offers by $5-7/mt from the prior week.
The daily Davis Index for containerized shredded, Tuesday, rose by $0.12/mt to settle at $325.57/mt cfr Port Qasim. Trades for containerized UK-origin shredded were at $325-327/mt cfr Port Qasim. Most offers from EU/UK were at $328-330/mt cfr Port Qasim on Tuesday following strengthening global cues.
This week, containers of Dubai-origin #1 HMS traded at $318-320/mt cfr Port Qasim. The Davis Index for UAE-origin HMS 1&2 (80:20) settled at $315/mt cfr Port Qasim, up by $1/mt from Monday. Mills chose to buy shredded over HMS scrap this week. The index for US-origin HMS 1&2 (80:20) settled at $315.45/mt cfr Port Qasim, up by $1.95/mt from Monday. Offers from South American ferrous scrap suppliers were at $310/mt cfr Port Qasim.
In the domestic market, Bala billet prices were at PKR91,000-91,500/mt ($567-572/mt) ex-works Punjab amid recovering demand. Leading Karachi-based producers offered rebar at PKR109,000-110,000/mt ex-works, prices which were unchanged from the prior day. In Punjab, mills refused to offer G-60 rebar at prices below PKR109,000-109,500/mt ex-works on Tuesday.
The Lahore government could ask some secondary steel mills, especially those without emission control machinery, to pause production for a few weeks due to heavy smog.
Domestic Pure Q toke scrap, equivalent to shredded sold at PKR68,700-69,000/mt del Lahore mill, at prices up by PKR300-500/mt from the last week.
Among other major updates, the Pakistan government is working for the privatization of four to five public sector entities in the current fiscal year, which might generate more than earlier budgeted PKR100bn, aiding the government to increase infra spending.