According to Mining News Pro -On uncertainties about hike in electricity power tariffs market turns stagnant.
In recent conversations with market participants, SteelMint learned participants remained waiting and seeking for more clarity on currency issues and Government’s awaited announcement about electricity power tariff in Pakistan. Economic coordination committee of cabinet is likely to approve an increase of up to 26% in power tariffs for different categories of customers. Electricity prices observe an increase PKR 3.75-3.82 per unit which may push local steel prices upward depending on acceptability from customer’s side.
Last week, after witnessing sharp depreciation of Pakistani Rupee against USD from 124 to 134 levels, market turned silent for imported scrap and local steel prices surged sharply by PKR 5000-6000/MT to digest its impact.
Imported scrap market observed limited offers at the moment - Containerized Shredded 211 from Europe and UK origin was traded at USD 355/MT, CFR Qasim. However, limited offers were heard in the stable range of USD 355-360/MT, CFR Qasim on W-o-W. Offers from USA heard very less this week as local market remains strong in USA.
HMS 1 scrap from Dubai was being quoted at around USD 350/MT, CFR Qasim. Few participants shared there are not many suppliers in the market as of now and offers may go up by USD 5/MT.
Local steel prices assessed as on 16th Oct’18 -
| Average Prices, Ex-work Punjab and Lahore,inclusive of taxes |
| Particular | 16th Oct`18 | Last assessment on 9th Oct`18 | W-o-W Change |
| PKR/MT | USD/MT | PKR/MT | PKR |
| Local Scrap (Equivalent to Shredded) | 60,000 | 451 | 59,000 | 1000 |
| Bala (Local Billet) | 80,000 | 602 | 81,000 | -1000 |
| CC Billet (Grade 40) | 86,000 | 647 | 87,000 | -1000 |
| CC Billet (Grade 60) | 88,000 | 662 | 88,000 | 0 |
| Deformed bar (G-60) | 100,000-101,000 | 752-759 | 99,000-100,000 | 1000 |
Source: SteelMint Research
Local steel market remains slow despite marginal improvement - According to sources, domestic steel market is gradually improving however in very slow pace. Market is likely to turn stable in next week with receiving of bailout package from IMF. Few participants remained apprehensive about further depreciation Pakistani currency resulting in further hike in local prices in Pakistan.
Major steelmakers in Karachi observe rebar prices little higher side than other regions of the country. Deformed G-60 and E-bar G-500 bar prices heard at PKR 106,000-107,000/MT and Deformed G-60 A-706 bar prices assessed at PKR 107,000-108,000/MT, ex-works in Karachi inclusive of taxes.
Deformed rebar prices in Punjab region were assessed at PKR 100,000-101,000/MT, ex-works and at PKR 105,000-106,000/MT levels in Sindh region. All these prices are inclusive of taxes.
Local scrap prices remained in line with imported scrap as supply remained tight. Local pure super toke scrap equivalent to Shredded is assessed at around PKR 60,000/MT (USD 451), ex-works inclusive of taxes.
Ship breaking market silent after currency depreciation - Pakistani Rupee lost over 10% of its value which shook the Gadani market putting it under pressure and local buying came to virtual halt for time being. Although local ship plate prices jumped up by PKR 3000-4000/MT W-o-W to PKR 80,000-81,000/MT levels and appeared to deliver some positivism. Yet, market remains in ‘Wait and Watch’ mode in order to evaluate moves of the central Government to resolve currency issues. Many of the buyers having tonnage in hand have remained away from buying and looked to divert vessels to other markets.
