The steel and raw materials market is surging at an unpredicted level which is fueled by multiple reasons as follows:
i) The positive vaccine news coming from across the globe which has given hope that the pandemic will be controlled soon.
ii) The beginning of the festival season which is pushing demand from all segments.
iii) Shortage of supply resulting from logistical difficulties and supply chain disruption due to pandemic related restrictions.
iv) Decrease in speed of goods movement due to winter season.
Container rates have been shooting upwards since past few weeks and have now reached to their seven-year highs. The soaring rates are the result of increasing shortage of containers and strong cargo demand, especially due to upcoming festival season demand.
The push for decarbonization will lead to a majority of vessels becoming unfit for use in the next decade. This will dramatically increase the number of ships going for demolition by 75% in 2030 compared to 2020 level.
(Source: Lloyd’s List Intelligence)
IMO led Global Industry Alliance has successfully conducted another trial for Just-In-Time (JIT) ship operations. JIT operations have the potential to cut the time ships spend idling outside ports and help reduce harmful emissions by communicating in advance the relevant information to the ship and allowing it to adjust to optimum speed.
UK ports are undergoing significant disruption in their functions as UK is set to lose its favorable trading status with the vast EU market on January 1, 2021, with new customs checks and paperwork expected to result insignificant delays to shipments of goods at the border. Tariffs and quotas will add the burden if there is no new UK-EU trade deal by then.
The prices being offered for vessels continues their upward trend which in turn is leading to a significant increase in supply of tonnage. More and more Ship owners are considering the option of scrapping their vessels to take benefit of the lucrative price currently being offered from the subcontinent which is swinging between the range of USD 420 to 450/LDT depending on the size and type of vessel.
The price of HMS has increased by USD 17/MT this week and is currently trading at USD 395/MT; the price of Shredded has touched USD 434/MT,an increase of USD 22 from last week.
The buyers are not showing strong interest for imported scrap as they are buying scrap and sponge iron locally.
Union Minister of India cautioned steel makers against profiteering as the steel prices have hiked by 55% in last six months. He requested for along-term policy to be made for steel manufacturers as the price hike did not match raw material and labour prices.
Shipping lines are raising their concerns against the provision placed in Merchant Shipping Bill 2020 regarding transparent freight charges. They have claimed that any such action will only go against the accepted, established free market principles in the logistics landscape, and asserted that the determination of ocean freight pricing was entirely dependent on market forces of demand and supply, and that the government should not interfere in this field.
Petroleum Ministry of India has announced a planned investment of $60 billion for creating Gas infrastructure in the country till 2024 which will include building of pipelines, LNG terminals and CGD (City Gas Distribution) networks.
The End Buyers in Chittagong are in a wait and watch mode after the finalization of few high-priced sales which were beyond the normal market price levels. They are waiting for the prices to stabilize further before making further purchases.
The price of HMS has increased by USD 29/MT this week and is currently trading at USD 431/MT; the price of Shredded has touched USD 446/MT,an increase of USD 20 from last week.
Bangladesh was born as an independent country on 16 December 1971 and celebrated its 50th Victory Day this week. The traditional parade with the participation of different contingents of the armed forces at the National Parade Ground was not held this year due to the Covid-19 pandemic.
The ties between India and Bangladesh have witnessed an upswing in the last few years. Both sides have scaled up trade and economic engagement besides implementing a number of connectivity and infrastructure projects. Prime Minister Narendra Modi and his Bangladeshi counterpart Sheikh Hasina on Thursday launched the fifth rail link connecting both nations during a virtual bilateral summit.
The government has decided to keep all educational institutions of the country closed till January 16 and will not hold the Higher Secondary Certificate (HSC), and equivalent examinations due to the Covid-19 pandemic.
Prices in Pakistan have improved due to rising raw material costs and large mills have started to increase their end product prices to absorb increasing raw material costs.
Ship breakers are facing severe shortage of gas as the government has directed all oxygen companies to send oxygen cylinders to hospitals and gas cylinders for domestic use to meet the increasing demand due to high number of COVID-19 cases. The cutting activities have come to a virtual standstill and it will take a few weeks before the situation gets completely normalized. The result is a slowdown of sales by breakers and prices have moved up by USD 18/MT.
The price of HMS has increased by USD 31/MT this week and is currently trading at USD 416/MT; the price of Shredded has touched USD 438/MT, an increase of USD 24 from last week.
This week the rebar prices moved up by USD 18/MT due to an increase in raw material prices.
The Government of Pakistan has announced that Covid-19 vaccine will be purchased by the government and will be available to everyone free of charge.
No new vessel has arrived in Aliaga this week.
Import scrap prices are soaring high in Turkey due to limited supply and increasing festive season demand. The mill booking rates are in the range of $420 for HMS 1&2 (80:20) and Shredded at $ 430 per tonne CFR. Despite the rise in prices, Turkish steelmakers have actively booked numerous bulk cargoes throughout the week to cater the increasing domestic demand.
Steel Prices have improved locally about USD 20/MT this week due to high demand coming from mills. The rising steel prices has boosted the sentiments of recyclers who are now eager to book more tonnage.
Debar export offer prices from Turkey were up by USD 65 over last week at USD 600/MT FOB.
Turkish Lira collapsed by almost 25% this year. To support the sinking currency, Turkish banks sold more than $100 billion this year alone. The currency traded at an all-time low of 8.57 per dollar as recently as November 6, 2020. It was at 1.54 per dollar on December 31, 2010.
There is complete four-day lock down in Turkey from 31st December 2020 evening until the morning of 4th January 2021 to curb the spread of COVID-19. The death toll has touched 16,646, making Turkey one of the worst-hit nations in the world.