Pakistan’s domestic steel prices rose by PKR1,500-2,000/mt from the prior week, despite a drop in imported ferrous scrap prices following global cues. Depreciation of the Pakistan Rupee led to a rise in prices this week. Pakistan Rupee (PKR) depreciated to PKR160.1 against US$1 on March 14 from PKR154.38 on March 9.
Prices for commercial Bala billet increased by PKR2000/mt from a week ago to PKR87,000-87,500/mt ex-yards Punjab inclusive of local taxes. The G-60 billet rose by PKR1500/mt from the prior week to PKR92,000/mt ex-works Punjab.
Mills raised prices for G-60 rebar to PKR108,000-109,000/mt ex-plant Karachi, up by PKR1000-1500/mt from a week ago. In Punjab region, it is being offered at PKR107,000-108,000/mt ex-plant Punjab.
Demand for finished steel has improved in the domestic market despite a sharp drop in international stock markets due to the COVID-19 outbreak and declined oil prices. Additionally, builders and contractors are looking to complete construction projects before the Ramadan month begins in April last week. Till then, market participants are likely to continue restocking ferrous scrap inventory.
Domestic shortage of ferrous scrap continues
Pakistan’s domestic high-grade scrap equivalent to shredded prices rose by PKR1000-1500/mt to PKR67,500-68,000/mt ex Punjab yard due to its limited availability. Gadani’s shipbreaking market was silent with no news of vessels arriving, causing a shortage of melting and rolling scrap with re-rollers and manufacturers.
Amreli steel’s rerolling mill shut for 10 days
Pakistan-based Amreli Steel’s rerolling mill at Dhabeji plant will remain shut for the next 10 days, according to the local media. The company faced some unexpected issue with the reheating furnace at the plant, Amereli informed the Pakistan Stock Exchange on March 18.
The mill has an annual capacity of 425,000mt. Due to the breakdown, Amreli’s rebar output is likely to drop by 8,000mt and impact its outlook for the quarter ending March 31, 2020. Their rebar sales target for the March quarter was 320,000mt.
The production at Amreli’s steel melt shop will remain unaffected and operational.