The subcontinent recycling market continues its strong price rally and aggressive appetite as demand outstrips supply amid scarcity of tonnage. There may be a further tightening of the tonnage supply during the upcoming Lunar New Year holiday, driving up prices.
India has seen a steep spike in demand this week, as evidenced by the soaring domestic prices closely followed by Bangladesh, whereas the offers from Pakistan remain range-bound due to decreasing domestic prices.
Oil headed for a sixth straight weekly gain as WTI rose above USD 87 per barrel backed by heightened geopolitical tensions, low inventories, and signs of robust global demand. Experts believe that the rise in geopolitical risks may lead to Oil prices touching the USD 100 mark this year.
China has showcased its tough stand on decarbonization by imprisoning 47 steel company officials for faking emissions data, as part of a long-running environmental crackdown in the steelmaking hub. The officials had reportedly interfered with monitoring devices to allow the release of large quantities of pollutants in March 2021.
The recent remarks made by the US Fed Reserve chairman Jerome Powell practically guarantee a rate hike in the March 15-16 meeting, emphasizing the economy’s strength and signaling an end to the pandemic-era economic support measures.
The buyers from India are showing healthy appetite as the domestic steel market has improved to a great extent and there is good demand from user industries like construction and automobiles. Few specialized units have been secured at quite attractive prices as there was high bidding interest around them from several buyers.
Major steel mills have increased the list prices of HRCs and CRCs by USD 10/MT this week. The increase in the cost of production along with the rising prices of raw materials have made mills increase prices, after having rolled over the same for early Jan'22 sales. There are expectations of another hike for Feb’22 deliveries amid robust export bookings and rising international prices of both raw materials and finished flat steel products.
Domestic steel prices have improved significantly this week leading to higher prices being offered by end buyers to acquire tonnage. Due to its high local prices, Bangladesh continues to retain the top spot in the price board of the subcontinent market.
After maintaining their prices at the same level for three weeks in a row, major mills have raised their Rebar offers by USD 15-20/MT.
Traders have resumed imported bulk scrap bookings after a two-week absence as the subdued domestic steel market sentiments caused buyers to stay away from the market earlier in the month, and they were waiting for fresh offers from scrap yards.
The demand outlook from Pakistan has been stable this week with range bound offers from end buyers as the domestic prices have not improved much. Due to lack of demand from construction sector, long steel industry has slashed price of rebars by USD 30/MT across the country.
The State Bank of Pakistan held its benchmark interest rate steady at 9.75% for the first time in four meetings to support growth momentum, while waiting for past increases in borrowings costs to temper domestic demand and cool inflation.
The escalating cost of electricity has fueled inflation and is leading many industries uncompetitive by taking a huge chunk of their margins. Many associations are protesting and writing to government to take this matter into consideration.
Rebar export prices have increased by around USD 10/MT this week due to higher costs, limited supply from production cuts, and gas shortages impacting steel production in Turkey.
Three days of suspension in crude steel production have been announced by EAF steelmakers due to electricity price hikes. Several factories will remain closed for longer duration. Furthermore, heavy snowfall has caused logistic problems in the steel market.
Increasing inflation and insufficient demand are causing the construction industry to lag behind, lowering Turkish scrap imports for Feb'22 deliveries.
Turkish Lira maintained its stability this week and is currently trading at TL 13.59/USD.