The demolition prices are reaching newer heights week on week as the end buyers from Pakistan and Bangladesh are constantly out-bidding each other in this intense competition to secure tonnage. Ongoing conditions such as strict lockdown in India and Bangladesh, shortage of oxygen and the upcoming festival holidays have definitely impacted the operations of recycling yards but have not been able to cause any significant change on the steel demand and rising prices.
As China returned to work after the Labor Day holiday from May 1 to May 5, its appetite for steel made Iron Ore log its highest price record this week. Looking at the current insatiable demand for steel, the current elevated iron ore prices are expected to remain the same for a long time.
The impact of rising steel prices has been felt by shipyards across the globe in their Quarter 1 reports. Even though there is a strong rebound in vessel orders and newbuilding prices, several major shipbuilding companies in South Korea and China have recorded lower than expected margins.
Oil prices have strengthened this week as vaccine-aided economic recovery picks pace in the U.S., Europe, and China. Though crude is up this week, there is serious concern about its demand stability as Covid-19 infections pummel demand in India, the world’s third largest consumer of Oil.
This week saw a slight dip in prices as the coronavirus cases are still surging at frightening levels and many states are under strict lockdowns leading to supply chain disruption. The cutting activity in yards remains ceased for another week due to unavailability of oxygen.
Indian steel mills have hiked their domestic prices of HRC by USD 48/MT and CRC by USD 70/MT for May’21 deliveries. We can expect further hikes as there is still significant gap between global steel prices and domestic prices.
Bangladesh is leading the price board week by week followed quite closely by its counterparts from Pakistan. The heavy demand for Ship plates is encouraging end buyers to offer competitive prices to secure tonnage.
The ongoing nationwide lockdown is extended again till May 16 with exceptions given to few major industries which are being allowed to operate. A week-long nationwide lockdown which started from April 5 is continually being extended as the government is wary to take any chance in the ongoing uncertain times especially with Eid festival round the corner.
The end buyers are on an aggressive buying spree which has made the demolition prices touch the USD 550/LDT mark this week.
Import scrap prices continued to climb as buyers are actively replenishing their scrap inventory before the Eid holidays.
The government has declared a 9-day holiday from May 8 to May 16 with strict restrictions on Business activities and public mobility. Banks will remain closed during this period with few relaxations on May 10 & 11.
One Tanker of about 18,000 LWT, an FPSO of about 22,000 LWT and a Ro-Ro passenger of about 6,000 LWT have arrived in Aliaga this week.
Import scrap price has increased by USD 30/MT whereas the domestic scrap prices have strengthened by USD 35/MT.
Turkey will remain under strict lockdown till May 17 with all schools and businesses remaining closed barring few essential services. The decline in reported Covid cases may be a result of lesser tests being conducted due to the current lockdown in place.