The subcontinent recycling market maintained its strength throughout the week despite continual surge in Covid cases across Pakistan and strict lockdown in Bangladesh. The end buyers are more inclined towards acquiring smaller tonnage as the frequent lockdowns have lowered their risk appetite for the time being. Overall, the scarcity of tonnage has ensured that prices remain firm on the prevailing high range.
The recent plunge in iron ore prices may just be the start of a sustained decline for the rest of the year, as demand from China, the world’s biggest consumer is widely expected to further drop. Chinese steel mills have been under strict orders from Beijing to limit their production in recent months as the country battles to get its pollution levels under control. After witnessing record highs in the first half of the year, iron ore prices are now on a declining trajectory.
Oil prices fell sharply in the last 3 days dragged by the worries about the spread of Delta variant and its imminent impact on the global energy needs but are now bouncing back today on supply concerns due to rising Middle East tensions.
The highly transmissible Delta variant has now been reported in 135 countries. Globally, the total number of cases went past the 200 million mark on Thursday forcing many countries to again enforce travel restrictions.
Thousands of people have been evacuated in Greece and Turkey as protracted heat waves turn forests into flames.
The end buyers of India have clearly bounced back in terms of buying interest as well as offering competitive prices for the available tonnage in the market. The firming ship plate prices are giving them enough boost to keep their offers intact, but the market participants are sceptical that the current prevailing prices are too high to remain stable for a longer time.
There's a transportation strike going on in Alang since 27th July to protest against the rising fuel prices which is now highly impacting the movement of scrap and other materials of Ships from the recycling yards to the market.
The domestic steel market is going strong in India with increased local demand and the export advantage received from China’s cancellation of VAT rebates and increase in export tariff. Major mills have liquidated substantial inventories through exports and are thus under no pressure to reduce prices.
The end buyers are showing decent buying interest despite the continuing strict lockdown. The ongoing restrictions on public and vehicular movement will be relaxed in phases from Aug. 11, and all the shops and shopping malls will reopen from the same day.
As the factories and warehouses across the country remain closed due to lockdown, more than two dozen vessels are waiting to discharge containers at Chittagong Port. Government has now allowed reopening of few factories from August 5 to address this situation as some vessels have waited more than 10 days at the port’s outer anchorage.
The Federal Board of Revenue on Wednesday notified the fixed value of steel products for assessment of sales tax through SRO 985. The sales tax will be applicable on the ad valorem basis at the rate as applicable. The value of steel bars and other long profile is fixed at PKR 140,000 per tonne, steel billets at PKR 125,000 per tonne, steel ingots/bala, ship plates at PKR 120, 000 per tonne and other re-rollable iron and steel scrap at PKR 118,000 per tonne.
It was further clarified that the value of goods will be the value at which the supply is made in case the value of supply of the goods is higher than the value fixed.
This will negatively impact the purchase price of ships for recycling.
No new vessel has arrived in Aliaga this week.
The demand for finished steel has softened leading to fall in prices being offered by the mills for obtaining raw materials. Imported scrap prices have dropped by another USD 10/MT this week leading to a sharp drop in comparison to previous month’s prices.
Turkish Lira maintained its stability this week and is currently trading at TL 8.59/USD.
In the midst of a severe heatwave and following months of dry weather, Turkey is facing its worst wildfires in years. Over the past 10 days, more than 130 wildfires have been reported across 30 Turkish provinces out of which 9 wildfires are still burning.