Pakistan Steel_Scrap price lose steam , (AKD Daily, Aug 24, 2021)
AKD Daily
Pakistan Steel: Scrap price lose steam
- International scrap prices have decreased by 11% since Jul’21 to currently stand at US$456/ton compared to last 3 months avg. of US$493/ton as global demand slows down with economic recovery stalling on the back of global floods and increasing Delta variant cases in major scrap trading regions.
- Closure of steel manufacturing facilities, end product supply chain disruptions and policy shift in China with Chinese manufacturers cutting down production by 6% have resulted in lower demand for scrap (down 11% since Jul’21)
- Local rebar prices have increased by 14.5% since Jul’21 vs a reduction of 11% in scrap prices since Jul’21. Soaring construction demand, higher freight cost (+US$40-50/ton to US$80-100/ton vs historical avg. of US$30-40/ton) and PkR devaluation (4% since Jul’21) have pushed local manufacturers to increase rebar prices rapidly.
- ASTL has posted performance of 10.8% against 2.2% of KSE-100, an outperformance of 8.6% since last month while moving forward, with earnings growth of 19% for FY21-24 and PEG of 0.48x, we expect the stock to continue performing with our TP of PkR64/sh providing an upside of 37.6% from last close.
AKD Research
Amreli Steels Limited is a Pakistan-based steel manufacturing company. The Company is engaged in the manufacture and sale of steel bars and billets. The Company offers a range of steel bars for all construction needs.
AKD Securities Ltd. is one of the leading securities firm in Pakistan, providing a comprehensive range of investor focused services, including equity brokerage, economic and securities research, investment banking and financial advisory services. AKD Securities accounts for more than 6% of the average daily value of the Karachi Stock Exchange. AKD Securities was the first brokerage house to launch an online trading platform in Pakistan in November 2002 and now has the largest market share with over 6000 customers. This has helped diversify and expand the retail investor base in the country and ushered in a whole new universe of investors to the stock market.
AKD Securities Ltd. caters to a diversified group of domestic and international institutional investors, high net worth individuals and upscale retail clients, including expatriate Pakistanis. With high quality research, unparalleled execution and distribution capability for both regular and large block trades, AKD Securities Ltd. has earned an outstanding reputation in the Pakistani securities industry.Outside of commercial banks, AKD Securities Ltd. is one of the biggest capital market firms in the country. AKD Securities is the leader in raising and providing risk capital in underwriting, market making and mergers and acquisitions in Pakistan. Good corporate governance and professionalism are emphasized throughout the firm and AKD Securities Ltd. is amongst the very few companies to have introduced a firm-wide comprehensive CODE of ETHICS, overseen by an independent compliance manager.Ultimately, our success is based on the quality of service we provide to our customers and the trust and confidence reposed in us by them. Our focus, therefore, remains on customer satisfaction at all levels in the company.
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