South Asia: Imported ferrous scrap market continues to slow down further ahead of holidays
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The South Asian ferrous scrap market continued to slow down further today. In India, buying interest for imported scrap has tapered off amidst volatile domestic conditions and sluggish demand for finished steel. Meanwhile, Pakistan's market remained lethargic due to cash flow issues and weak demand. In Bangladesh, low demand for imported scrap mirrors a slowdown in the domestic steel sector, compounded by delays in LC approvals
Overview
India: In India, buying interest for imported scrap has slowed due to domestic market volatility, slow finished steel offtake, and bid-offer disparity. Indicative offers for shredded scrap from the US, Australia, and the UK/Europe were assessed at $415-420/t CFR Nhava Sheva, while HMS (80:20) offers from the UK/Europe and West Africa were assessed at $395-398/t CFR.
A trader mentioned that," The near-term market will remain slow as the monsoon season approaches, but suppliers are not willing to lower offers, leading to uncertainty."
Pakistan: The Pakistani market continued to be sluggish due to a weak finished steel market and cash flow issues, leading to minimal trading activity. Indicative offers for shredded scrap from the UK/Europe were assessed at $424-428/t CFR Qasim.
A steel mill official observed: " The market is slow, with significant cash flow problems and only a few customers are inquiring for rebar, most of whom are requesting for credit."
Bangladesh: In Bangladesh, imported scrap demand remained low due to a slowdown in the domestic steel market and delays in LC approvals. Indicative offers for shredded scrap from the UK/Europe were assessed at $425-430/t CFR Chattogram, while HMS (80:20) was assessed at $405-410/t CFR.
In the domestic market, local ship-breaking scrap prices were heard at BDT 61,500-62,000/t. Rebars were assessed at BDT 89,000-89,500/t ex-Dhaka and BDT 94,500-95,000/t ex-Chattogram.
A trader noted that, given the current steel demand and production levels, rebar and billet prices are expected to decrease further. Additionally, inquiries for bulk imports from Australia and the US face pricing challenges and issues with LC approvals for larger volumes.
Turkiye: Market participants anticipate a slowdown in Turkish deep-sea scrap procurement as mills have already secured 15-16 cargo deals for early July. Although three or four mills are still actively seeking cargo, there are not enough offers available.
Recently, a West Marmara-based steel mill booked a US-origin cargo comprising HMS (90:10) at $386/t on a CFR Turkiye basis.
Price assessments
India: UK-origin shredded scrap indicatives were assessed at $420/t CFR Nhava Sheva, down by $2/t d-o-d.
Pakistan: UK-origin shredded indicatives were assessed at $424/t CFR Qasim, down by $1/t d-o-d.
Bangladesh: UK-origin shredded prices edged up by $1/t to $426/t CFR Chattogram.
Turkiye: US-origin HMS (80:20) bulk prices were assessed unchanged at $384/t CFR Turkiye, d-o-d.
Outlook
In the near term, uncertainty prevails as buyers are showing limited interest in imported scrap due to several factors including bid-offer disparities, a sluggish finished steel market, cash flow challenges, and delays in LC processing. Additionally, as the Eid holiday is approaching, market activities are expected to further slow down, particularly in Pakistan and Bangladesh.
