Imported Scrap Offers to South Asia Crash to Over Three Years Low on Limited Buying
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Offers to Pakistan, India and Bangladesh Fall by over USD 35/MT W-o-W.
Imported scrap offers in containers to South Asian Markets have collapsed heavily over the last one week, on successive sharp drops in Turkish prices as well as low buyers' interest due to wide ongoing production cuts/shut downs across the South Asian markets amid severe covid-19 outbreak in this region over the last 10 days.
Shredded 211 offers to Pakistan from EU/UK origins were witnessed at around USD 240/MT CFR today, down from USD 278/MT at last week's closing, with a few bookings observed at this price level, while some suppliers from north European region also offered at USD 235-240/MT CFR range. This price level is the lowest in 3.5 years, as prior to this, shredded scrap was sold to Pakistan at lower than USD 240/MT way back in Oct 2016.
In spite of most mills in Pakistan currently being shut down or running at low capacity, buyers looked to book some material at such low price levels, in order to average out the bookings made earlier this year at significantly higher prices, when slow domestic steel market had offered little margins to the steelmakers. However, apart from a few odd bookings, the trades are likely to pick up only after 6th April, when the covid-19 lock-down ends in Pakistan.
India: Imported offers to India also plummeted by similar margins, with US origin Shredded scrap down to USD 240/MT CFR Nhava Sheva, in comparison to USD 276-280/MT last week. But offers remained quite limited with most suppliers mentioning slow incoming of scrap at yards and slow collection. This could be attributed to both, restrictions due to coronavirus, as well as sharply declined prices.
Although, with almost all secondary steel mills (major consumers of imported scrap) in India having closed their operations this week, and a limited few operating at bare-minimum capacity post the lock-down in the country, buying of imported scrap is expected to remain negligible in the coming few weeks.
Bangladesh: Bangladesh buyers too remain less interested in fresh bookings, with all major players having booked high volumes via recent bulk bookings (highest ever for Bangladesh in Mar'20). Shredded offers were quoted at USD 255/MT CFR from North America and Europe, with one booking in containers being reported at this level, however on an overall basis, buyers remained silent with little inquires. HMS offers stood at around USD 240/MT on an average from various origins.
