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Pakistani buyers cautious over recent dip in South Asian steel prices

By: SteelBis Research


The shortage of tonnage, and continued high demand from the recyclers across South Asian demolition yards adds up to a promising market, that looks set to continue till the end of the year according to industry sources, however, there have been some warning signs suggesting that price levels in the region have peaked and once yards can secure a few units at these new highs, likely, price levels will once again correct themselves.

In Pakistan, particularly, the recent sharp correction in domestic scrap prices due to furnace closures in Punjab, despite a shortage in material availability has begun to weigh on sentiment. Domestic 5-up ship plate prices after having climbed to their highest levels at Rs.147,000/t Ex-Gadani have nearly witnessed a correction of Rs5000/t in the past 10 days with recent offers assessed around Rs.142,000/t Ex-Gadani as of November 20th 2021.


The Indian recyclers also started the week on a firm note but reports suggest the levels have now tailed off we come to the end of the week amid a sharp drop in steel plate prices in the Indian market due to sluggish demand. According to local sources, Melting scrap prices in Alang fell to INR 38,300/t on Friday, November 19th 2021, while plate prices in the domestic have collapsed more than $25/Ton over the week

The Bangladesh market in contrast remained firmly positioned this week as demand from recyclers rose amid stronger fundamentals in the domestic market; robust offered prices above $600/t LDT levels are maintaining interest, with scrapyards focusing mainly on larger LDT units.

In its latest weekly report, shipbroker Clarkson Platou Hellas said that “an incredible turnaround came to light this week with notable sales achieving aggressive/firmer rates mainly for the Bangladesh shores. The Indian recyclers also started the week on a firm note but reports suggest the levels have now tailed off we come to the end of the week. Pakistani recyclers are also keen to acquire tonnage and would possibly offer similar numbers, however, would probably only have an opportunity to acquire units that are ideally placed geographically closer to them”.

On a separate note, Allied Shipbroking commented that “the ship recycling market continued to move at “moderate activity” levels, with tanker units still holding centre stage. The longer the anticipated market rebound takes to emerge, the more interest is expected to arise for retiring vintage tanker units, as the liquidity drain worsens for owners. On the other hand, despite the recent correction noted in the dry bulk market, we do not expect an increased interest to scrap units to emerge anytime soon, as freight rate levels and sentiment are still at considered high levels”.

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