The outlook for subcontinent recycling market remains positive with firm demand from Pakistan and Bangladesh leading to the ongoing unprecedented prices being offered from both the markets. India is still not keeping pace with these two markets in terms of prices as demand has not fully recovered post second wave of Covid, and such high price levels are not feasible as India’s domestic market is not heavily dependent on recycled steel.
Global steel prices continue their volatility due to multitude of factors such as extreme freight prices, container shortages, demand and supply imbalance and constant changes in export and import duties of major countries on steel products. This price volatility is likely to be sustained through the second half of 2021 as these factors are here to stay.
The OPEC+ stalemate has caused extreme volatility and unpredictable rise and fall in Crude Oil prices this week. The failure to reach to an agreement is leading to massive speculation in the markets as there is no certainty regarding the oil supply volume till the deadlock continues.
Several EU countries have decided to again tighten their entry restrictions fearing the spread of highly contagious Delta variant which is the dominant strain in several countries and is the cause of a steep surge in Covid cases worldwide.
The end buyers from India are still adopting conservative approach in offering prices due to contraction in demand caused by slower economic recovery from second wave of Covid and ongoing monsoon season. Recyclers are currently satisfied with few vessels which come to India for being recycled under specific green recycling clauses.
Major steel-mills have reduced prices of HRC by USD 25-27/MT to induce buyers and revive sales after the second wave of pandemic impacted the domestic demand.
The export duties imposed by Russia on all steel products and China’s strict output curbs to achieve environmental goals may provide good export opportunity for Indian steel mills in the coming month.
The market remains stable with decent demand for small and mid-sized vessels and very limited demand for larger tonnage as the buyers are not confident due to extended lockdowns and incessant monsoon season.
The domestic market is expected to see fewer activities this month as the lockdown has been extended for one more week and is slated to end on 14th July. Additionally, the Eid holidays are scheduled from 20th July which will again lower the trading activities.
There is a big relief for all the yards of Pakistan as they received cutting permissions which were halted last week due to the ongoing investigations on alleged Tanker issue. The demand and prices in local market are escalating and the outlook seems positive for the coming week as the prices are expected to improve slightly before the market closes for Eid holidays.
This week the recyclers are facing a considerable delay in obtaining beaching permission from the authorities. We hope that this situation is resolved soon as the market is going strong, and both the owners and recyclers may lose opportunities due to this impending issue.
One small Platform Supply Vessel and a 15,000 LWT Shuttle Tanker have arrived in Aliaga this week.
The European Commission has introduced anti-dumping duties ranging 4.8-7.6% of import value, on hot rolled flat products of iron, non-alloy or other alloy steel originating from Turkey which is effective as of July 5, 2021.
Sharp fluctuations in Turkish Lira continues to affect the domestic market. It is currently trading at TL 8.68/USD.
Turkey’s annual consumer inflation is expected to shoot more than 20% as economic data showed a 2-year high of 17.5% in June after the easing of pandemic restrictions last month boosted consumer spending.