Pakistan: Imported Scrap Prices Stable; Local Steel Market Eyes Improvement
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SteelMint learned in recent conversation with market participants that imported scrap prices remained almost steady in recent deals, however, outlook turns positive on local steel activities. Scrap restocking for February delivery is likely to pick up at improved prices in the near term with sellers expecting scrap prices to have already bottomed out.
SteelMint's assessment for Shredded scrap stands almost stable on a weekly basis. In recent deals confirmed, containerized Shredded 211 sold in the range USD 315-318/MT, CFR Qasim from leading suppliers in USA and UK. However, asking rates from suppliers for Shredded now stand in the range of USD 318-323/MT, CFR Qasim.
Last week, some bookings were concluded for Shredded scrap at USD 312-313/MT, CFR by leading steel mills in the country, however, these offer levels seem not available this week.
Asking rates of UAE origin HMS 1 heard at around USD 320-322/MT, CFR and limited deals from Dubai reported at USD 317-320/MT, CFR Qasim. Offers for South African HMS 1&2 stand in the range USD 315-320/MT, CFR Qasim.
While a few offers for UK and European HMS heard in the varied range of USD 305-315/MT, CFR depending on quality.
Local steel prices rebound after correcting mid-last week - Domestic steel prices have regained earlier levels after witnessing a correction last week. Local billet prices had dropped by PKR 1,500-2,000/MT during the mid of last week. Many small furnaces were selling at corrected levels due to liquidity crunch but prices have rebounded back to earlier levels now.
On a weekly basis, billet and scrap prices remained more or less the same. Rebar prices corrected by PKR 2000/MT on W-o-W basis however with anticipation of picking up in activities, the price increase can be foreseen in a weeks' time or so.
Local scrap prices observed upward pressure amid low inventories available locally. Local scrap equivalent to Shredded assessed in the range PKR 56,000-57,000/MT, (USD 400-407) ex- works
In the Punjab region, average prices for Deformed bar G-60 reported at PKR 94,000-95,000/MT, ex-works and in the Sindh region at PKR 97,000-98,000/MT, ex-works. However, G-60 rebar prices stand at around PKR 100,000/MT, ex- works in the Southern region.
Small steel mills which are not integrated have shut down and other few have resumed operating even with 1-2% loss, thus, activities remained very less seeking more clarity on the direction, market sources reported.
Market awaits Mini budget announcement - As per reports, the Mini budget by the new government will be announced on 23rd Jan'19. Pakistan Steel Melters Association pursuing with customs department against newly revised unreasonable customs values and commerce department to reduce electricity rates from PKR 13/Unit to PKR 9.5/Unit. Also, to change the status of tax-free areas like FATA, PATA and Dargai to make them competitive in the market.
SteelMint's local steel price assessment -
| Average Prices, Ex-work Punjab and Lahore, inclusive of taxes | |||
| Particular | 14-Jan'19 | Last assessment on 07-Jan'19 | Change |
| PKR/MT | PKR/MT | PKR | |
| Local Scrap (Equivalent to Shredded) | 56,000-56,500 | 56,000-56,500 | 0 |
| Bala (Local Billet) | 74,000-74,500 | 74,000-74,500 | 0 |
| CC Billet (Grade 40) | 79,000-79,500 | 79,000-79,500 | 0 |
| CC Billet (Grade 60) | 80,500-81,000 | 80,500-81,000 | 0 |
| Deformed bar (G-60) | 94,000-95,000 | 96,000-97,000 | -2000 |
Source: SteelMint Research
