South Asia: Imported ferrous scrap market sees downtrend amid dull buying interest

• In India, buyers adopt cautious approach amid market uncertainty
  
  
• Participants expect slowdown due to holidays, seasonal factors
  
  

The South Asian ferrous scrap market experienced a downward trend today, influenced by various regional factors. In India, buyers took a cautious approach amid the uncertainty surrounding the formation of a new government following recent elections. Similarly, the Pakistani market remained sluggish due to cash flow issues and subdued steel market sentiments. In Bangladesh, while there were offers for US-origin bulk HMS and shredded scrap, bids remained lower. Sellers anticipated a potential market uptick next week. However, the upcoming Eid holidays and monsoon season are expected to further slowdown activities across the region.

Overview

India: In India, buyers have adopted a wait-and-see approach due to the market uncertainty surrounding the recent elections. They are seeking more clarity and waiting for government formation. Indicative offers for shredded scrap from the US and UK/Europe are hovering at $415-420/t CFR Nhava Sheva, while HMS (80:20) offers stand at $395-400/t CFR.

A trader observed, "I also feel that there will not be much impact on the market. The downward trend is due to the negative sentiments because the actual results are not in line with the exit poll results, and this time it will be a coalition government. It might be a short-term impact. The impact of the results might affect where regional governments are going to change, such as Odisha, Andhra Pradesh, Uttar Pradesh, Punjab, and other similar states. Otherwise, market sentiments will eventually stabilise , although imported scrap prices will be on the higher side due to the upward trend in freight rates."

Another trader said, "Buyers have adopted a wait-and-watch strategy, as election results are not yet out. Additionally, finished steel sales are slow, and mills have lowered production."

Pakistan: The Pakistani market continued to remain slow due to cash flow issues and subdued steel market sentiments. Indicative offers for shredded scrap from the UK/Europe were assessed at $420-425/t CFR Qasim.

A trader said, "The market is very uncertain, and cash flows are tight. Due to Eid, labour availability is short. Things will only improve if any new projects are announced in the budget. Current projects are on hold."

Notably, around 500 tonnes (t) of UK-origin shredded scraps were heard to be concluded at around $424/t CFR Qasim.

Bangladesh: In Bangladesh today, offers for US-origin bulk HMS (80:20) were heard at $410/t CFR Chattogram, and $420/t CFR for shredded, and $425/t CFR for bonus. However, bids were lower, at $405/t CFR for HMS (80:20), $410/t CFR for shredded, and $415/t CFR for bonus. Sellers are resisting these bids, anticipating a market uptick next week, but the upcoming Eid holidays and the monsoon season are expected to slow down activities. Market sentiments are currently low. In the containers market, offers for Australian-origin containerised HMS (80:20) are at $410/t CFR, while buyers are bidding $400-405/t CFR. Sellers are also less interested due to rising freight rates, particularly in the East Asian region. The majority of offers are absent from the market, with both sellers and buyers in a wait-and-watch mode to see where the market will settle. Australian-origin shredded scrap is offered at $435-440/t, but these levels do not meet buyers' expectations.

Turkiye: Turkish imported scrap offers of HMS (80:20) were assessed at $380/t CFR, up $1/t on the day. Turkish mills continued to inquire for material despite a strong restock in late May, attributed to an upcoming mid-June holiday that will likely limit market activity. A trader noted, "US domestic pricing is coming down, but no Europeans will sell below $378/t CFR, so US recyclers need not go below $380/t CFR."

Turkish mills find it difficult to drop scrap prices, but their depressed market conditions prevent substantial price rises. Higher offers were reported, with US-origin HMS (80:20) at $386/t CFR and EU-origin material at $385/t CFR. An unconfirmed bid for EU-origin HMS (80:20) at $379/t CFR was rejected. A short-sea supplier and other market participants expect prices to remain range-bound, citing market equilibrium and the lack of fundamental changes as reasons for exiting this flat market.

Price assessments

India: UK-origin shredded scrap indicatives were assessed unchanged d-o-d at $418/t CFR Nhava Sheva.

Pakistan: UK-origin shredded indicatives were assessed at $422/t CFR Qasim, down by $2/t d-o-d.

Bangladesh: UK-origin shredded prices edged down by $1/t to $423/t CFR Chattogram.

Turkiye: US-origin HMS (80:20) bulk prices were assessed at $380/t CFR Turkiye, up by $1/t d-o-d.