Pakistani mills hike CRC and HDG prices amid weaker currency

After Pakistani producers of cold rolled (CRC) and hot dip galvanized (HDG) coils revised their offer prices upwards four times in January, a new price hike has been announced in the first week of February given the continuous devaluation of the national currency against the US dollar. At the same time, in the import HRC segment a lull has been seen in business activity, with offers moving in different directions.

More specifically, on February 4, local prices for CRC and HDG increased by PKR 15,000/mt ($55/mt) compared to the previous offers. The sharp drop in the value of the Pakistani rupee against the US dollar to an all-time low is one of the main reasons for the revision of prices. However, given the continuous devaluation of Pakistani rupee, prices on US dollar basis have remained relatively stable or even $1-3 lower compared to last week’s offers.

“The Pakistani rupee has been taking a major hit and is now eyeing 300 to the dollar, while the falling value of the rupee is driving up the cost of imported goods. So, we expect Pakistani mills to increase their CRC and HGD prices further in the short run,” a market insider said.

Meanwhile, according to market insiders, trade activity in import HRC market in Pakistan has remained muted due to the letter of credit issue and the unclear future price direction. More specifically, while suppliers from Japan have settled their offers for SAE1006 HRC at around $700-710/mt CFR, up by $20-30/mt over the past two weeks, lower offers have been coming from Chinese traders this week. In particular, offers for ex-China SS400 HRC have been heard at around $630-640/mt CFR Karachi, down by $20/mt week on week. Though, no new import HRC prices from Taiwan and South Korea have been heard in Pakistan this week.

All prices on Pakistani rupee basis include 17 percent VAT.

$1 = PKR 275.15