South Asia: India's imported scrap demand remains slack; suppliers anticipate prices bottoming out

The South Asian scrap market experienced mixed trends across countries on Friday, influenced by seasonal factors, economic conditions, and shifting expectations. In India, demand for imported scrap continued to decline as buyers hesitated, expecting further price drops, while some suppliers believed prices were nearing the bottom. Pakistan's market, on the other hand, remained moderate, with buyers restricting purchases to immediate needs due to a slowdown in the domestic steel sector. In Bangladesh, recent floods and monsoon significantly dampened scrap demand. Meanwhile, Turkiye's market remained mostly stable, with sellers holding out for better prices as mills worked to finalise their September bookings.

Overview

India: In India, demand for imported scrap continued its downtrend as buyers hesitate at current price levels, expecting further declines. However, some suppliers believe prices have nearly bottomed out and anticipate that buyers will begin replenishing inventories by mid-September. This outlook is supported by the approaching end of the monsoon, which typically signals an increase in activity, along with emerging signs of recovery in the Turkish market.

Indicative offers for shredded scrap from the UK/Europe are currently assessed at $385-390/t CFR Nhava Sheva, while HMS (80:20) is priced at $365-375/t CFR.

Pakistan: Demand for imported scrap in Pakistan remained moderate, with buyers limiting purchases to immediate needs due to a slowdown in the domestic steel market during the monsoon. Indicative offers for shredded scrap from the UK/Europe hovered around $400/t CFR Qasim.

In another significant development, Fauji Foundation (FF) has shown interest in acquiring Agha Steel Industries (AGHA) as part of its strategy to diversify into sectors such as construction, energy, and financial services. This acquisition aligns with FF's goal of achieving vertical integration in the steel industry, complementing its existing cement business. FF's interest led to a 10.03% increase in Agha Steel's stock, pushing it to a seven-month high. The acquisition process will involve due diligence, regulatory approvals, and final agreements.

Bangladesh: Imported scrap demand in Bangladesh remained sluggish due to recent floods and the rainy season, which have nearly halted construction activities and reduced scrap consumption. Additionally, there was a gap between bids and offers. Indicative offers for shredded scrap from the UK/Europe were assessed at $400-405/t CFR Chattogram, with HMS (80:20) at $390-395/t CFR.

Malaysian offers for PNS scraps were around $420/t CFR, bundles at $400/t, and HMS (90:10) at $410/t CFR.

A steel mill official remarked, "We are interested at $380-385/t levels, but offers for UAE HMS 1 scraps are at $395/t. The market is inactive due to floods and delays in LCs, along with financial verification issues."

Turkiye: The Turkish imported scrap market remained mostly stable, with a slight $1/t increase in offers. Sellers were cautious, holding back on deals in anticipation of better prices, as mills had yet to finalise their September shipment bookings. Despite a few recent transactions, sellers stayed firm, aiming for higher prices due to limited scrap availability and high collection costs in Europe. Turkish mills, facing fewer billet offers, continued to show interest in scrap imports, driven by a modest recovery in iron ore prices. This could potentially lead to increased scrap purchases, depending on developments in the Chinese market.

Price assessments

• India: UK-origin shredded scrap indicatives remained stable at $390/t CFR Nhava Sheva from previous day.
  
  
• Pakistan: UK-origin shredded indicatives remained stable at $400/t CFR Qasim from previous day.
  
  
• Bangladesh: UK-origin shredded prices remained stable at $400/t CFR Chattogram from previous day.
  
  
• Turkiye: US-origin HMS (80:20) bulk prices edged up by $1/t to $365/t CFR Turkiye from previous day.