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The ongoing war has put all the commodities on the frontline, exacerbating a price swing that is making it difficult for ship recyclers to make buying decisions at such heightened volatility. Despite the elevated price levels, the global shortage of scrap availability is making the end buyers bid competitively for the scarcely available tonnage in the ship recycling market. This week Bangladesh witnessed slight correction in offer prices as their domestic demand is low due to the upcoming holy month of Ramadan whereas the neighbouring markets of India and Pakistan are pulling the strings with heated demand in their respective domestic markets, thus creating an attractive market for ship owners who are planning to retire their aging assets.
Oil market is in the middle of a storm with prices swinging wildly in both directions as punitive measures imposed against Russia have heightened supply concerns around the world pushing the prices upwards whereas on the other hand the U.S. and its allies are discussing a coordinated release of oil from reserves to ease the prices. Market experts believe that crude oil prices will stay above USD 100 per barrel till a resolution of the Russia-Ukraine conflict is reached as there’s no easy substitute to the Russian share of oil supply in the market. Brent crude is currently trading at USD 119 per barrel.
The United States announced to drop Trump-era aluminium and steel tariffs on the United Kingdom, while the latter will drop retaliatory tariffs on U.S. products. The two nations have resolved a longstanding irritant to work towards strengthening trade and integration.
Steel demand and prices in the domestic and global market have given enough confidence to the end buyers to bid aggressively and secure tonnage from the recycling market thereby increasing the offer prices by about USD 10/LDT this week. While last week saw a slight dip, the prices have been rallying again this week as the demand has surpassed the available supply in the market.
Major steelmakers are planning to invoke the force majeure clause and renegotiate short- and long-term contracts with customers following an abnormal sharp spike surge in raw material costs.
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The sentiments of end buyers have been on the weaker side this week in comparison to the neighboring recycling destinations of Pakistan and India as the market is in a wait and watch mode for a clear direction. Though the recyclers of Bangladesh are still leading the price chart, the inquiries from buyers have slightly reduced causing a decrease of about USD 15/LDT in their offer.
Domestic rebar prices continued to hit new highs with major steel mills raising their rebar offers further by USD 23/MT week on week. Market participants are expecting the prices to lower down in upcoming days as the trading activities will remain dull during Ramadan.
Buying interest from the recyclers of Gadani have been upbeat this week with increasing demand from domestic market and decreasing inventories in the recycling yards. They have increased their offer prices to remain competitive among the key subcontinent players and secure tonnage among the scarcely available units in the recycling market.
PKR is bearing the brunt of political uncertainty in the domestic front and surging crude and commodities prices globally. The surge in commodities prices is deepening the nation’s current account deficit and creating a spell of depreciation around the currency. It is currently trading at PKR 181.60/USD
Turkey being a major importer of scrap is witnessing mixed sentiments as the global scrap prices remain volatile due to the ongoing geopolitical tensions.
Peaking inflation levels are leading to lower finished steel demand in domestic market forcing the steel mills to pause their buying activities.
Export rebar prices stayed firm owing to new foreign markets created due to exclusion of imports from Russia in EU market.
Turkish Lira remained stable this week and is currently trading at TL 14.83/USD
LEADING CASH BUYER OF SHIPS AND
ENERGY ASSETS WORLDWIDE