South Asia: Imported ferrous scrap market sees further downtrend d-o-d

The South Asian ferrous scrap market remained under pressure today due to unsupportive domestic steel prices and other challenges. Indian buyers are hesitant due to a sluggish domestic steel market and continuous declines in scrap prices, further impacted by the approaching rainy season. Pakistani buyers remained muted post-Eid, with the government closing Pakistan Steel Mills (PSM) due to financial issues. Meanwhile, the Bangladeshi market is in a wait-and-watch mode, with slow material flow from the Far East amid rising freight costs and container availability uncertainties. Additionally, the Turkish market showed a mix of steady buyer levels and anticipated domestic price declines for certain US scrap grades, influenced by firm market conditions.

Overview

India: Indian buyers are currently hesitant to book imported scrap due to a sluggish domestic steel market and continuous declines in domestic scrap prices. This is leading to uncertainty and expectations of further drops in imported offers. The upcoming rainy season in major Indian regions is also expected to impact scrap buying in the near term. For instance, domestic HMS (80:20) scrap prices stood at around INR 34,600 on 22 June (last week closing), marking a drop of INR 1,100/t to INR 33,500/t DAP Jalna today.

Indicative offers for shredded scrap from the US and UK/Europe are at around $410-415/t CFR Nhava Sheva, while HMS (80:20) offers from West Africa and the UK/Europe are at $385-390/t CFR.

Additionally, a bulk scrap cargo from Richmond Port, San Francisco, on the US West Coast, is scheduled to arrive at Chennai Port by 29 June, 2024. This shipment, booked by a Chennai-based steel mill, consists of approximately 30,000 t of mixed scrap, mainly shredded and bonus scrap. The price details of the bulk vessel were not confirmed at the time of reporting.

Pakistan: Pakistani buyers remained muted due to a slowdown in the domestic steel market, which has not fully resumed post-Eid. Normalcy is expected to return next Monday, but overall industry production remained at 30-40%. Additionally, the government is closing Pakistan Steel Mills (PSM) due to financial struggles, mismanagement, and political interference. The land will be repurposed for industrial use by the Sindh provincial government, with plans to establish a new steel mill on the PSM grounds.

Indicative offers for shredded scrap from the UK/Europe are at $420-422/t CFR Qasim.

Bangladesh: The Bangladeshi market is in a wait-and-watch mode due to bearish steel demand. Buyers are concerned about viability as material flow from the Far East remained slow, affected by rising freight costs and container availability uncertainty. Indicative offers for shredded scrap from the UK/Europe are at $424-428/t CFR Chattogram, while HMS (80:20) offers are at $400-405/t CFR.

Turkiye: An East Marmara mill has booked Europe-origin HMS (80:20) at $383/t CFR Turkiye, while an Aegean mill secured US-origin HMS (80:20) at $389/t CFR Turkiye. A UK supplier sold 15,000 t of mixed scrap to a Mediterranean mill at $385/t and $407.5/t CFR Turkiye.

Buyer levels are at $384-385/t for Europe-origin and $386-388/t for US-origin cargo. Some Turkish participants expect a $20-30/t decline in certain US scrap grades domestically.

European suppliers reported a firm market due to limited scrap flow, with Benelux mills paying better prices than exporters. HMS supply in Benelux is tight, with collection costs at Euro 315/t delivered to docks and a $20/t gap between export and domestic prices.

Price assessments

India: UK-origin shredded scrap indicatives were assessed at $415/t CFR Nhava Sheva, down by $1/t d-o-d.

Pakistan: UK-origin shredded indicatives were assessed at $421/t CFR Qasim, down by $2/t d-o-d.

Bangladesh: UK-origin shredded prices were assessed at $424/t CFR Chattogram, unchanged d-o-d.

Turkiye: US-origin HMS (80:20) bulk prices were assessed at $389/t CFR Turkiye, up by $3/t d-o-d.