Pakistan: Domestic Scrap Prices Surge on Limited Availability
SteelMint learned in conversation with industry participants that there is a shortage of domestic scrap in the market added to which Pakistan’s ship-breaking industry has been in the hibernation state witnessing very less of ships being beached for cutting operation since last two quarters in Gadani’s market.
Shortage of ship plates and local scrap increases steelmakers’ dependency on imported scrap further in Pakistan. Local scrap equivalent to Shredded is being reported at PKR 62,500-63,000/MT (USD 441-445), ex-works inclusive of taxes, up sharply by PKR 2,000/MT (USD 14) on W-o-W basis.
On the other side, imported scrap prices in Pakistan have been declining successively in last one weeks’ time. Major steel mills made procurement of imported scrap in significant volumes at corrected prices to replenish their stocks. However, successive softening of scrap offers from suppliers turned buyers hesitant again since last two days.
SteelMint’s assessment for containerized Shredded scrap stands at USD 328-330/MT, CFR Qasim, down USD 5/MT from USD 333-335/MT level against last week’s report. Asking rates from the recyclers in UK and Europe are being quoted at around USD 330-333/MT, CFR and USA suppliers are offering even at USD 327-330/MT, CFR Qasim. In recent trades, Shredded 211 scrap sold in containers reported sold at USD 328-330/MT, CFR Qasim.
However, offers for Middle East origin HMS 1 heard in the range of USD 325-328/MT, CFR depending on quality. Limited deals are being concluded as buyers step back with other subcontinental markets paying higher at the moment while few sellers are quoting HMS 1 in the range USD 332-335/MT, CFR.
Local steel prices inch up; no major initiative from the government yet - Local steel market is observing no significant change in the demand for steel bars due to inconsistent policies of the government. Prices marginally move up but the position remains more or less the same as last week.
Private investors remain reluctant to invest in any of the construction projects due to strict accountability from NAB. Non-releasing funds fully for Government’s metropolitan projects yet turn building contractors reluctant to take up any new projects. As a result, many contractors are not releasing overdue payments of material suppliers. Liquidity issues thus are consistently putting pressure on finish steel demand in the country.
SteelMint’s assessment of local billet prices stands at PKR 81,000-81,500/MT (USD 572-575) ex-works. Rebar prices in Northern region reported at around PKR 97,000-98,000/MT that of Southern at PKR 98,500-99,500/MT, ex-works respectively. While asking rates for steel bars G-60 being quoted at around PKR 100,000-101,000/MT, ex- Karachi inclusive of local taxes.
source: SteelMint
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