Posted on 11 Jul 2022
Following the surge in scrap offers in neighbouring nations coupled with aggressive bookings by Pakistan-based mills amid low scrap inventories, suppliers are reported hiking their offers to Pakistan.
Early last week, offers for UK- and EU-origin shredded scrap surged by $35-40/tonne to $472-475/t cfr Port Qasim. They then grew to $480-482-485/t cfr Port Qasim on Wednesday. Offers on Thursday and Friday were noted at $485-490/t cfr Port Qasim, Kallanish notes.
Pakistan-based mills booked around 3,000 tonnes of UK-origin shredded scrap at $473-475/t cfr on Monday and Tuesday, whereas around 4,000-5,000t of UK-origin shredded scrap was booked at $480-483/t on Wednesday and Thursday. No bookings were heard concluding on Friday.
“There is a panic and shortage of scrap in the market,” a trading source said on Friday. “Mills have low inventories and know the UAE will be off and Europe will also be off starting next week or so, which is why they [mills] are seen aggressive to book the cargoes even at a high prices. Plus, the rupee is also continuously sliding against the dollar, which is further denting their costs.”
Offers for United Arab Emirates-origin HMS1 surged by a further $15/t on-week to $520-525/t cfr Qasim on Friday. Offers last Monday were noted at $515-520/t, which were marginally up by $5-10/t from the week before last. Last week, around 1,000-1,500t of HMS1 scrap were booked from UAE at $515-520/t cfr Port Qasim.
The market also received offers for HMS 80:20 from the UK at $450-460/t cfr Port Qasim; however, no bookings were made.
“The market has become tough and HMS has gone to insanely high levels,” opines another source. “It is like a competition: sellers are hiking their offers in Pakistan by citing the surging sentiment in India. But in my opinion, this high level of scrap will not sustain for long; the market will clash in the coming two to three weeks.”
The State Bank of Pakistan has hiked the interest rate by 1.5% to 15%, which will further hurt the mills taking credit by opening letter of credit to procure scrap in the coming days.
Meanwhile, no bookings were done in Bangladesh. Multiple sources have confirmed the nation is facing an acute shortage of dollars, owing to which mills have not been able to procure any imported scrap in recent weeks.
Source:Kallanish
