The prices of imported ferrous scrap in Pakistan and Bangladesh rose to an 8-month high following a bullish trend in Turkish bulk scrap prices. Availability with Pakistan mills remained limited while Bangladesh mills expect domestic markets to turn supportive this week with improvement in end-user demand.
Pakistan
Weak domestic steel demand and lack of support from buyers slowed ferrous scrap trade in Pakistan. Pakistani buyers are expected to book containers this week only if demand from downstream sectors return.
The Davis Index for containerized shredded on Tuesday settled at $323/mt cfr Port Qasim, up $1/mt from Monday. Pakistani mills resisting high offers, however, picked up trades on Tuesday. Trades for UK-origin shredded reported in containers at $320-322/mt cfr Qasim pushing most offers in the range $325-328/mt cfr Qasim on Tuesday.
Most HRC buyers in Pakistan were active for trades from China. Optimisms on strengthening trade relations with China in upcoming construction projects will benefit the steel sector.
The Davis Index for UAE-origin HMS 1&2 (80:20) Tuesday settled at $307.5/mt cfr Port Qasim. Trades for UAE-origin mixed #1 HMS and P&S sarya scrap were at $310/mt cfr Port Qasim. The index for US-origin HMS 1&2 (80:20) settled at $307/mt cfr Port Qasim, stable from Monday in absence of trades. Gadani’s shipbreaking market was silent again this week and trade remained slow amid cash crunch.
In the domestic market, Bala billet prices rose by PKR500/mt to PKR91,500/mt ex-works Punjab with limited trades being reported at these levels from Friday.
High prices of imported scrap pushed domestic Pure Q toke scrap equivalent to shredded at PKR70,300-70,500/mt ex-works Lahore. Mills are struggling with limited cash flow and weak steel demand, and had to book material inspite of finding it unfeasible.
Bangladesh
Bangladesh’s domestic steel market showed signs of revival as domestic steel prices rose BDT300-500/mt in line with rising demand. Most infrastructure projects have resumed, and demand is expected to return to normalcy after mid-September, with major mills turning 100pc operational.
Many steelmakers are struggling to settle their bank clearances due for the April-May months. Huge cash crunch and low sales of construction steel has put them under pressure. These mills are liquidating their inventories despite losses to adjust their overdues cost, preventing Bangladesh domestic steel prices from going up despite recovering demand.
Imported bulk scrap offers were in the range of $325-330/mt cfr Chattogram but no trades were reported in the market. Demand for containers hasn’t recovered either.
The Davis Index for containerized shredded settled at $328/mt cfr Chattogram Tuesday, down $1/mt from Monday. Trades were reported at $325-330/mt cfr Chattogram for UK-origin material while offers for EU and Australia-origin were around $315-325/mt cfr Chattogram depending on quality. Trades are expected to gain further in Bangladesh on improving domestic fundamentals.
Small scale mills were running on limited raw material as Indian sponge iron turned non-viable on supply tightness.
Trades for containerised UK-origin HMS 1&2 (80:20) reported at $320/mt cfr Chattogram, up $5/mt from the prior week. The index for Latin America-origin HMS 1&2 (80:20) settled at $308.57/mt cfr Chattogram, up by $1.68/mt from Friday. A few containers traded for Brazilian HMS 1&2 (80:20) at $308-310/mt cfr Chattogram, while #1 HMS of South Africa and South America origin were traded at $317-320/mt cfr Chattogram.
The index for US-origin HMS 1&2 (80:20) was at $317/mt cfr Chattogram, up by $1/mt from Monday. Sellers offered HMS 1&2 (80:20) at $318-320/mt cfr Chattogram, while buyers booked the grade at $315-317/mt cfr Chattogram in the early week.
A leading steelmaker in Chattogram continued its restocking activity for ferrous scrap before resuming operations at their newly installed electric arc furnace. The steelmaker had postponed commencement at this site due to the COVID-19 pandemic impact on demand.
Small scale rebar was offered at BDT49,000-49,500/mt ex-works. Large steel producers offered rebar at BDT56,000-57,000/mt ex-works, while a few offered discounts of BDT1,000/mt and sold them at BDT55,000/mt ex-works.
Domestic shipbreaking scrap equivalent to P&S was traded at BDT30,500/mt ($359.6/mt) del mill on Tuesday while HMS 1&2 (80:20) was at BDT29,000/mt ex-Chattogram.
($1= PKR166.3; BDT84.83)