As expected, with bearish sentiments mounting in China lately, Pakistani hot rolled coil (HRC) buyers have continued to seek lower prices in negotiations. Thus, several deals are reported to have been done by Pakistani pipe makers for ex-China SS400 materials. At the same time, business activity has remained limited in the country which is still affected by letter of credit (LC) issues, though market insiders expect HRC imports may revive in April amid the removal of cash margin requirements on imports.
More specifically, following several deals for ex-China SS400 HRC at $660-665/mt CFR last week, more deals were reported at $650/mt CFR at the end of last week and the beginning of this week. Furthermore, a deal for at least 3,500 mt of ex-China SS400/Q195 HRC has been signed at $658-660/mt CFR this week, according to sources. Offers for ex-China SS400 HRC have been mainly voiced at $660/mt CFR, versus $660-680/mt CFR last week.
Meanwhile, offers for ex-China SAE1006 HRC have been reported through traders at $670/mt CFR, down by $10/mt over the past week. “Offers from Chinese mills are obviously higher, or standing at around $700/mt CFR, but many traders have been trying to sell short these days, lowering their offers,” a Pakistani trader told SteelOrbis.
At the same time, other foreign suppliers like those from Japan, Taiwan and South Korea have been not in a hurry to lower their offers. Thus, SAE1006 HRC offers from Taiwan and South Korea have remained at around $720-725/mt CFR for end-of-May shipment, while offers for ex-Japan HRC have been voiced at slightly below $750/mt CFR.
Notably, according to market insiders, Pakistani HRC importers have been more positive in terms of a business activity revival in April, given the recent announcement of the State Bank of Pakistan to remove the existing 100 percent cash margins on 177 imported products, including flat rolled products and pipes, effective as of March 31. As SteelOrbis reported earlier, the importers will not have to deposit the amount of money equal to the total value of the import transaction with a bank in order to open LCs. “We will see its effects in the first week of April. Scrap imports were not subject to 100 percent margins, so I don’t expect much of a change in this segment. But some flat products were subject to cash margins which will help importers of HRC if implemented,” a Pakistan-based trader told SteelOrbis.
