The subcontinent market continues its strong price rally by touching newer heights every passing day. With very few vessels being floated in the demolition market, this upward trend is set to continue for the upcoming weeks. On the demand and pricing front, Bangladesh leads the chart by bidding aggressively for any available tonnage, closely followed by Pakistan. Market activities in many regions remained muted this week due to the Eid holidays and are expected to pick pace from next week onwards.
China’s continued focus on reducing carbon emissions and the strong market indications about upcoming export tax and export quotas on steel are the factors which are giving momentum to the ongoing super cycle of global steel prices.
Oil prices saw a steep fall in the beginning of the week due to the uncertain economic impact of surging COVID-19 cases but was followed by strong recovery from mid-week onwards as the demand growth ensures that supply will remain tight.
The WHO on Thursday urged Indonesia to implement a stricter and wider lockdown to combat surging COVID-19 infections and deaths, just days after the country's president flagged the easing of restrictions.
The Tokyo Olympics kickstarts with an opening ceremony being held today while Tokyo remains under fourth state of emergency.
End buyers from India are improving their bids in a slow but steady pace. Though there is still a considerable gap in comparison with the prices being offered by its subcontinent counterparts, this upward movement in prices is a positive sign for the market.
Domestic steel demand and prices remain under pressure and the mills are considering to provide further price support to encourage buying. The sluggish domestic demand is making export options more lucrative for major steel mills, but the shortage of containers and ever-increasing freight charges are a major deterrent for choosing export route.
Bangladesh is going on a 14-day strict nationwide lockdown from today i.e., July 23 until August 5. All offices, factories and shops will remain closed this time without any exception. Despite the lockdown in place, the buying interest from ship recyclers remain active which is being reflected from the soaring prices.
The new extended lockdown is a further blow to the steel industry as the mills have long been dealing with hampered logistics and ceased retail steel sales.
The end buyers of Pakistan are showing active buying interest but remain cautious with the current prevailing unprecedented price levels. Though the price of ship plate remains high, the recyclers are not confident about finalizing the deals at such high levels.
Most of the major steel mills have increased the price of finished steel by USD 25/MT as the domestic market is seeing active demand.
The PKR took a steep plunge against USD and moved from PKR 159.51/USD to PKR 162.45/USD within this week causing an unfavourable situation for the end buyers.
No new vessel has arrived in Aliaga this week.
Imported scrap prices have further softened by USD 5/MT this week. Steel mills are expected to make fresh offers once they return to the market next week.
Export cuts from China and the possible introduction of steel export tax has put Turkish mills in an ultra-competitive export position given the widened spreads that have opened up between Turkish and Chinese rebar prices.
Turkish Lira has remained stable this week and is currently trading at TL 8.55/USD.
Turkey's new coronavirus cases have doubled in just over two weeks to 9,586 on Thursday, prompting a warning from the health minister.