South Asia: Imported ferrous scrap market sees mixed trends

The South Asian ferrous scrap market experienced mixed trends across India, Pakistan, and Bangladesh. While India faced slow market activities due to ongoing elections and logistical challenges, Pakistan saw minimal interest in imported scrap amid subdued steel demand and tight cash flows. In contrast, Bangladesh maintained moderate market activities, with a promising near-term outlook due to anticipated economic recovery.

Overview

India: In India, market activities remained slow due to the ongoing elections. According to market participants, no significant changes were observed today. Additionally, rising freight costs and transit times, coupled with container shortages, have created uncertainty among buyers. Indicative levels for shredded scrap from the US and UK/Europe were assessed at $415-420/t CFR Nhava Sheva, while HMS (80:20) offers were heard at $390-400/t CFR.

A trader stated, "Everyone waited for the election results. No changes in the market today, so no major activities are expected."

A steel mill official commented, "Due to the hike in freight costs and container shortages, there are no firm offers in the market. We expect some clarity in a day or two. Production levels are normal at 95%, but we haven't booked any imported material in the last 10 days."

Pakistan: Pakistani buyers showed minimal interest in imported scrap due to subdued finished steel demand. Additionally, tight cash flows have kept overall industry production levels low, at around 30-40%. Indicative offers for shredded scrap from the UK/Europe were assessed at $420-425/t CFR Qasim.

In the domestic market, local scrap prices were reported at PKR 150,000-155,000/t, while rebar prices were assessed at PKR 250,000-260,000/t.

A steel mill official said, "Weak demand for steel has resulted in unsustainable rate increases and mills operating at reduced capacity - around 30-40%."

A trader added, "Major mills have shut down, with one large mill laying off 50 people and production averaging at 30%. Rebar and scrap prices have increased despite the lack of active buying and selling."

Bangladesh: In Bangladesh, market activities remained moderate. Indicative offers for shredded scrap from the UK/Europe were assessed at $420-425/t CFR Chattogram, and HMS (80:20) at $405-410/t CFR. The construction sector is experiencing weak demand due to slow project development and payment issues. However, the near-term outlook is optimistic, with industry estimates projecting a potential demand increase of 3 mntpa (million tonne/per annum) within the next three years.

AKS, a major steel mill, is planning to boost rebar output by commissioning a 1.6 mntpa rebar mill in July 2024, which will raise AKS's total rebar capacity to 2.8 mntpa. Additionally, BSRM, Bangladesh's largest steel producer, is expanding with a new 600,000 t p/a rebar mill in Chittagong, expected to start production in July-August 2024.

Turkiye: Turkish deepsea imported ferrous scrap prices remained saw a slight decline of $1/t, with limited market activity and no fundamental changes. Indicative values for US HMS (80:20) were mostly shared at $379/t CFR, while EU-origin HMS (80:20) were at $372-375/t CFR. Turkish mills were facing low margins on rebar sales, causing them to incur losses, though they prefer exporting at a loss over pausing production. Turkish exported rebar at $573/t FOB, with the scrap to rebar spread at $194/t, below the $200/t target. Despite the pressure on scrap prices, some market participants expect prices to rise in the near term.

Price assessments

India: UK-origin shredded scrap indicatives were assessed unchanged d-o-d at $417/t CFR Nhava Sheva.

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

Bangladesh: UK-origin shredded prices edged up by $2/t to $423/t CFR Chattogram.

Turkiye: US-origin HMS (80:20) bulk prices remained drop by $1/t to $379/t CFR Turkiye.