Pakistan: Imported Scrap Prices Stable in Recent Trades
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SteelMint learned in recent conversation with participants that imported scrap market seems steady in recent deals in Pakistan, however, suppliers turn bit resistive after the jump in Turkey scrap prices yesterday.
Buyers are waiting for the Mini budget of government to be announced tomorrow (23rd Jan'19) to bring positivity in the market and local steel prices likely to move up with the news of additional fixed sales taxes and uplift schemes.
SteelMint's assessment for Shredded scrap inched up slightly on a weekly basis. In recent deals confirmed, containerized Shredded 211 sold in the range USD 318-320/MT, CFR Qasim from suppliers in USA and UK. However, asking rates from suppliers for Shredded stand firm in the range of USD 320-323/MT, CFR Qasim.
Asking rates of UAE origin HMS 1 heard at around USD 323-325/MT, CFR and very limited deals reported. The UK and European HMS assessed in the range of USD 305-315/MT, CFR depending on quality.
Local scrap prices observed upward pressure amid low inventories available locally. Local scrap equivalent to Shredded witnessed a sudden jump against the last report.
The quite listless trading being reported at the moment and scrap buyers turn in 'Wait and Watch' mode for Feb-Mar'19 delivery bookings on volatile local scrap and steel prices.
"All steel prices may surge if the implementation of additional fixed sales tax of PKR 8,400/MT approved in the Mini-budget" shared a source.
Local steel prices stable after a marginal downward correction - Severe liquidity issues, surplus availability of steel but very low demand put steel prices under pressure.
In the Punjab region, average prices for Deformed bar G-60 reported stable at PKR 94,000-95,000/MT, ex-works however, G-60 rebar prices stand at around PKR 100,000-101,000/MT, ex- works in the Southern region.
Few of the established steel bars brands were selling Deformed Grade 60 bars in range PKR 91,000-92,000/MT on an advance cash basis for running their day to day routine expenses in Punjab.
CPEC and Metropolitan construction projects are not fully operational yet. Cheap priced FATA, PATA, Dargai and Iran smuggled steel billets and bars are still available in local markets. All melters are expecting from the Government to offer relief in taxes in order to support the steel industry.
Options proposed for the revival of PSM - Pakistan's Economic Coordination Committee has directed the expert group and Ministry of Industry and Production to plan for operationalization of PSM (Pakistan Steel Mill) extending about three months' time further. The PSM is closed since June 2015 due to multiple reasons and all efforts to revive the largest industrial unit of the country have failed so far.
Recently, Pakistan Govt releases PKR 233.4 Billion for public sector development program for 2018-19. This includes ongoing and new projects under various divisions like National Highway Authority, Railways, Water resource, Petroleum, Aviation which may boost resumption of local steel market activities.
SteelMint's local steel price assessment -
| Average Prices, Ex-work Punjab and Lahore, inclusive of taxes | |||
| Particular | 21-Jan'19 | Last assessment on 14-Jan'19 | Change |
| PKR/MT | PKR/MT | PKR | |
| Local Scrap (Equivalent to Shredded) | 57,500-58,000 | 56,000-56,500 | 1500 |
| Bala (Local Billet) | 73,000-73,500 | 74,000-74,500 | -1000 |
| CC Billet (Grade 40) | 79,000-79,500 | 79,000-79,500 | 0 |
| CC Billet (Grade 60) | 80,000-80,500 | 80,500-81,000 | -500 |
| Deformed bar (G-60) | 94,000-95,000 | 94,000-95,000 | 0 |
Source: SteelMint Research
