Another quiet week in the recycling market as the volatility in steel prices is causing end buyers to keep a cautious approach while offering bids and the downtrend in prices is discouraging the owners from offering their units for demolition leading to an extreme shortage of tonnage availability in the market.
Among the three major subcontinent markets, prices have further softened in India by USD 10/LDT this week, whereas they have remained stable in Bangladesh and Pakistan.
Oil price rebounds after a back-and-forth session in the past week as investors no longer expect the Omicron coronavirus variant to derail global economic growth. With the WHO still saying the exact impact of Omicron is “difficult to know” and several countries putting travel restrictions, the oil prices are expected to remain volatile in near future.
The recent rally in Iron ore prices as China’s imports rose 14.6% m-o-m in November to hit their highest since July 2020 hints that the worst is over for the steel-making ingredient.
Global stock markets steadied this week as the fears of Omicron variant fades with more reports claiming that its less severe than initially feared given hospitalization rates have not surged even with the increase in infection rates.
The domestic demand for steel plates remains dull thereby pulling back offer prices from the recyclers who believe the prices will see further corrections before stabilizing. Currently the offer prices from India are lagging behind the neighboring subcontinent markets of Bangladesh and Pakistan.
Indian stock market snapped their winning streak today while the INR hit an 18-month low against the USD ahead of US inflation data that could set course for sooner interest rate rise by the Federal reserve. INR is currently trading at 75.86/USD.
The end buyers have maintained their prudent approach as they are looking for signs of increase in demand before finalizing deals for securing tonnage. With the recent heavy rainfalls and halting of ongoing construction projects, the demand has slowed down to a great extent leading to a dull market sentiment discouraging buyers to make further purchases.
Imported scrap offers have recorded a further decline of about USD 10-15/MT following the global price drop.
The offer prices are not witnessing any uptrend even though there is a stable lifting of steel plates from the domestic market. Alarming level of increase in smog in many areas have reduced the pace of consumption in the country as factories are operating under capacity to keep the smog levels under check.
Major steel mills have raised their rebar prices by USD 10-15/MT citing persistent rupee devaluation, rising costs of imported steel scrap, electricity, gas and fuel and supply chain disruptions. The State Bank of Pakistan’s move to increase the interest rate to 8.75pchas also increased the cost of doing business which is highly affecting the margins of steel producers.
The imported scrap prices fell by about USD 10/MT whereas the domestic scrap prices remained stable and even seeing a slight upward trend.
The price of domestic long steel continues to climb amid weakening Lira.
Turkish lira plummets to record low week on week in a dramatic depreciation of its value leading to nationwide protests in the country against the ruling government as millions of people are losing their lifetime of savings to experimental economic policies. It is currently trading at TL 13.93/USD.