Ferrous scrap importers in Pakistan and Bangladesh have turned silent as the countries celebrate Eid-al-Adha this week. Economic activities have taken a backseat. Banks operations are also likely to be closed for most of the week.
The daily Davis Index for containerized shredded, Monday, fell $1.86/mt to settle at $541.14/mt cfr Port Qasim amid some deals at lower prices. A few deals for shredded were reported at $540-542/mt cfr Qasim before the markets closed for the holidays.
Most mills looked to clear utility bills due in the last week of the month, amid a liquidity crunch. Overall, the ongoing monsoons have also lowered trades.
In the domestic market, billet and rebar prices, however, rose before Eid. Rebar prices increased by PKR4,000-4,500/mt to reach PKR159,500-160,000/mt ex-works Karachi and PKR158,500-159,000/mt ex-works Punjab. Local rebar offers were above PKR146,000/mt ex-works Lahore. Due to a shortage of ferrous scrap and the resulting rise in input costs, mills revised asking prices for rebar.
Offers for domestic Bala billet were at PKR130,000/mt ex-works on Monday, up PKR2,000/mt from prior week.
Pakistani currency depreciated to reach PKR160.85 against $1 from PKR159.5 last week. The currency depreciation also pushed domestic steel prices up despite weak sales.
The Bangladeshi government has eased the national lockdown for seven days for the Eid-al-Adha festival. But the country will go into another stringent lockdown for two weeks starting July 23 with the closures of all government, semi-government, autonomous, and private offices in addition to travel and transport restrictions.
Following a slowdown in demand during the Eid holidays, steel prices were under pressure and few mills offered discounts to boost sales. Shortage of labor, liquidity crunch, along with diversion of oxygen supply for COVID-19 patients, has hampered production rates.
The daily Davis Index for containerized shredded on Friday settled at $552.5/mt cfr Chattogram, down by $0.75/mt.
For HMS scrap, mills lowered bids by $3-5/mt on bearish sentiments. The daily index for containerized HMS 1&2 (80:20) from the US was at $532.5/mt cfr Chattogram, down 1.25/mt. The indexes for Australia and UK-origin HMS 1&2 (80:20) in containers were at $527/mt and $519/mt cfr cfr Chattogram, respectively, down by $1/mt.
The daily Davis Index for HMS 1&2 (80:20) from Latin America, Monday, settled at $516/mt cfr Chattogram, down $2/mt. Offers in the domestic markets of Latin American countries have dropped upto $10/mt on Monday, yet for the export orders, most yards expect stable prices.
Following softening global cues, Taiwanese imported ferrous scrap prices dropped marginally on Monday. The daily Davis Index for US-origin containerized HMS 1&2 (80:20) settled at $456/mt cfr Taiwan, down $1/mt from Friday. Trades were reported in the range of $455-458/mt cfr Taiwan. A decline in Japanese prices after Tokyo steel reducing purchase prices byJPY500-1,000/mt ($4-9/mt) could pull down bids further for imported scrap in Taiwan.
On Monday, Feng Hsin Steel kept domestic scrap and rebar prices unchanged from a week prior.