Imported Scrap Market Standstill, Domestic Steel Market Lacks Clarity

SteelMint learned in recent conversation with market participants that local steel prices in Pakistan have come down today after witnessing a slight lift towards the closing of the last week

Few participants have resumed back operation after New Year vacation, however, overall sentiments remained still dull. Also, few sources mentioned local steel market hasn't gained momentum amid bank holidays.

According to sources, suppliers are yet to come back fully into the market however, new offer levels heard for containerized Shredded scrap at around USD 325-327/MT, CFR Qasim from Europe and UK origin. On a weekly basis, SteelMint’s assessment remains standstill for imported scrap.

Offers for Middle East origin HMS 1 in containers assessed stable at around USD 323-325/MT, CFR. While very limited offers of HMS 1&2 are being reported at around USD 320-322/MT, CFR.

Local steel market awaits clarity - According to sources, a jump of PKR 1000-1500/MT observed in local steel prices after reopening the market last week, however, few furnaces have resumed back operation to recover losses following which supply side is growing and local steel prices have come under pressure again this week.

Surplus stocks of finish steel and slow demand increasing the gap between supply and demand and thus, local prices have now dropped back to the levels assessed earlier last week.

Many steel mills and plants in Punjab and KPK temporarily closed down due to extremely cold weather slowdown amid closing of the month and gas load shedding in few regions of the country. Liquidity issue also has not resolved yet. Participants remain hopeful for stability after a few weeks.

Amreli Steel observes stable sales in December - Despite a weak situation in the local market, Amreli Steel, a leading Steel mill in Karachi managed to sale considerable volume in December. An official reported that total sales recorded at around 19,000 MT in Dec’18 which usually remains around 15,000 MT every month. Deformed G-60 bar prices stand in the range PKR 105,000-106,000/MT, ex-Karachi inclusive of taxes.

Although the first quarter in the subcontinent ship recycling sector being historically a positive, Gadani based participants are likely to wait for a comeback in its local steel market in months ahead.