South Asia: Firm sellers' stance spurs uptick in imported scrap offers

Today, the South Asian ferrous scrap market witnessed a slight upward trend, driven by robust offers from suppliers in Europe and the US amid constrained supply and elevated freight rates. In India, buyers exhibited hesitancy in procuring imported scrap as more cost-effective options were available in the domestic market. Simultaneously, European suppliers refrained from providing firm offers to Pakistani buyers on better realisations in Turkish bookings. Bangladeshi buyers, facing delays in letter of credit processing, explored alternatives such as sponge imports from India.

Shredded scrap offers saw a $2/t increase in India and Pakistan while remaining stable in Bangladesh. The US bulk HMS (80:20) offers to Turkiye experienced a $2/t uptick compared to the last closing on 8 December.

Market overview

India: In India, there was a noticeable lack of enthusiasm in fresh bookings for imported scrap, primarily attributed to the price disparity and the availability of cost-effective options in the domestic market. Indicative prices for shredded scrap from Europe were reported at $425/t CFR, while from the US offers were at $420/t CFR. Offers for HMS (80:20) scraps stood at $405/t CFR from Europe and ranged between $410-415/t CFR from Australia.

A trader remarked, "Although there is an increase in offers, actual buyers are scarce. Inquiries are being received, but they are not aligning with the current pricing levels. Furthermore, higher offers are prompting buyers to explore other alternatives, such as procuring scrap or sponge iron domestically."

Furthermore, a bulk cargo comprising around 34,000-35,000 t of mixed scrap arrived lately at Kandla Port. Notably, this vessel was booked by Mono Steel- a leading Gujarat-based steel mill.

Pakistan: In Pakistan, market activities continued at a slow pace, with only a limited number of sellers actively participating, influenced by more favourable opportunities in alternative markets, particularly in Turkiye. Additionally, the domestic market remained subdued due to sluggish sales of rebar. Offers for shredded scrap from Europe were reported at $430-437/t CFR Qasim.

A trader commented, "At the moment, suppliers are not inclined to making offers in Pakistan due to aggressive bookings from Turkiye at elevated prices."

Meanwhile, local scrap prices were heard within the range of PKR 160,000-165,000/t exw.

Bangladesh: The demand for imported scrap in Bangladesh remained at a moderate level, with buyers encountering challenges related to LC (Letter of Credit) opening and a decline in forex reserves. Shredded scrap offers from Europe were assessed at $445-448/t CFR Chattogram, while HMS (80:20) scraps were reported at $424-428/t CFR.

In response to concerns about LCs, Bangladeshi buyers diverted their attention to alternative options, leading to the booking of sponge iron from India. For instance, a transaction involving 11,000 tonnes of sponge iron (FeM 80%, 100% lumps) was completed for Bangladesh at $380-385/t CPT Benapole.

Additionally, a substantial quantity was reportedly secured by a Bangladesh mill, consisting of approximately 32,000 tonnes of mixed scraps. However, the specific quantity of each type could not be confirmed. Price levels were indicated at $432/t for HMS (80:20), $437/t for shredded, and $445/t CFR for PNS.

Turkiye: Turkiye's import scrap prices rose, bolstered by recently concluded deep-sea sales. A prevailing bullish sentiment was evident among industry insiders. The tightening supplies of scrap in major seller markets, coupled with a recent surge in bulk freight rates, led to increased costs for deep-sea cargoes destined for Turkiye.

Industry sources suggested that this combination might have contributed to a further escalation in prices.

Recent deals

• Around 2,000 t of HMS (90:10) scraps were booked from Australia at $415/t CFR Chattogram.
  
  
• About 500 t of shredded were booked from the Middle East at $435/t CFR Qasim.
  
  
• A parcel of 500-t sheared HMS was procured from the Middle East at $420/t CFR Qasim.
  
  
• About 500 t of HMS (80:20) were secured from East Africa (Mozambique) at $387/t, CFR Mundra.
  
  

Price assessments

India: UK-origin shredded scrap indicatives rose by $2/t to $425/t CFR Nhava Sheva today.

Pakistan: UK-origin shredded scrap indicatives up by $3/t to $433/t CFR Qasim today.

Bangladesh: UK-origin shredded scrap prices were assessed stable at $448/t CFR Chattogram.

Turkiye: US-origin HMS (80:20) bulk prices were assessed at $430/t CFR Turkiye, up by $2/t d-o-d.

Outlook

In the short term, the outlook for imported scrap offers in the South Asian markets suggests a sustained firmness due to a resolute stance from sellers. Nevertheless, buying activities in India and Bangladesh may persistently lag due to buyer resistance and challenges associated with letter of credit (LC) issues.