Pakistan: Cautious Buying Pulls Down Imported Scrap Prices
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Imported scrap Offers to Pakistan have plummeted over the last week, following a downturn at global levels as well as low bids and general disinterest from the buyers' side. This week, the buying activates remained the slowest among the last 4-5 weeks, although few odd bookings were concluded. Sudden currency depreciation also remained a concern.
SteelMint's assessment for Shredded 211 from UK/Europe stands at USD 290/MT CFR, down sharply by USD 10-11/MT against last week. Although offers for March loading are USD 300/MT and above due to premium for prompt shipment, however, for April loading, the offers stand at USD 289-290/MT CFR from UK. A couple of bookings were reported at USD 290-291 in the recent few days. Some offers from USA were reported slightly lower by USD 2-3/MT.
Buyers are currently targeting USD 285/MT levels for Shredded, and the workable price may drop to these levels. However, due to the continuation of the container shortage situation, market anticipates that the suppliers may not be able to deliver the shipments on time.
HMS scrap from Dubai is being offered at around 280-290/MT CFR, depending on quality and may decline further in the coming days.
Pakistani Rupee depreciated last week on slump in economy due the covid-19 outbreak and its impact on Chinese investments in Pakistan. From 154 levels over a week ago, the PKR slumped to 160 levels against USD by the end of last week and currently hovering at 158-159 levels.
Domestic Steel Prices Appreciate - Due to the Ramzan month starting from the last week of April, infrastructural projects are under pressure to get completed before that, resulting in some improvement in steel demand and consequently pushing the domestic prices up, which had remained more-or-less flat for several weeks now. Depreciation in currency and stock market situation also contributed to the rise in steel prices.
Local scrap and CC Billet prices also moved up by PKR 1500/MT w-o-w, while bala billet offers surged by PKR 2500/MT. In the northern region, rebar's average offer prices were reported at around PKR 107,000-108,000/MT, ex-works (USD 671-677), up PKR 1000/MT w-o-w, while southern (Karachi region) steel mills are offering at PKR 109,000 ex works.
| Average Offer Prices) | 17 Mar'20 | Last Assessment on 10 Mar'20 | Change W-o-W |
| PKR/MT | PKR/MT | PKR | |
| Local Scrap (Equivalent to Shredded) | 68000 | 66500 | 1500 |
| Bala (Local Billet) | 87500 | 85000 | 2500 |
| CC Billet (Grade 40) | 92500 | 91000 | 1500 |
| CC Billet (Grade 60) | 93500 | 92000 | 1500 |
| Deformed bar (G-60), Ex-Punjab/KPK | 107,000-108,000 | 106,000-107,000 | 1000 |
| Deformed bar (G-60), Ex-Sindh (Karachi) | 108,000-109,500 | 107,000-108,500 | 1000 |
Source: SteelMint Research
