South Asia: Imported ferrous scrap market slows down on bid-offer gap, cash flow crunch

• India, Pakistan, Bangladesh see subdued demand

  
  
  

• Turkish prices stable, but bearish sentiments emerge

  
  
  

The South Asian scrap markets faced continued pressure as weak demand, financial constraints, and ample inventories weighed heavily on trade activity.

In India, Pakistan, and Bangladesh, market participants struggled with sluggish buying interest, exacerbated by a persistent bid-offer gap and ongoing challenges related to cash flows and LC issues. Conversely, Turkiye's deep-sea imported scrap market remained stable, but bearish sentiment dominated, as mills delayed bookings due to slow domestic rebar sales.

Overview

India: In India, demand for imported scrap remained sluggish due to weak buying interest, a persistent bid-offer gap, the festive season, and a slowdown in domestic steel sales. Indicative offers for shredded scrap from the US and UK/Europe hovered at $395-400/t CFR Nhava Sheva, while HMS (80:20) was quoted at $380-385/t CFR.

A representative of a trading company noted, "The market has not responded to these offers amid a misalignment in expectations between buyers and sellers."

Pakistan: Pakistan's imported scrap market remained subdued today, with sluggish demand. Offers for shredded scrap from a UK premium yard were heard at $400/t CFR Qasim, while other yards quoted $395-397/t CFR.

A steel mill official observed, "Cash flow challenges persist, and market participants are struggling to release newly arrived material, which is now being offered at competitive prices."

Domestically, local scrap held steady at PKR 140,000-145,000/t, with rebars priced at PKR 245,000-250,000/t. According to a market participant, "Sales improved by 25-30%, but overall sentiment remains negative, as dealers are offloading material at lower prices due to slow demand and cash constraints. While the recent tax revision has boosted margins, market recovery is still limited."

Bangladesh: The demand for imported scrap in Bangladesh weakened due to ongoing letter of credit (LC) issues and ample inventories with mills. Indicative offers for shredded scrap from the UK/Europe were at $400-405/t CFR Chattogram, while HMS (80:20) stood at $390-395/t CFR.

A trading company representative explained, "US West Coast sellers cannot sell in Bangladesh right now, so they are opting for India instead. It is heard that 5-6 vessels have already been traded, primarily targeting the east coast of India. Bulk offers from the US may face delays, with recent quotes at $395-400/t being rejected by bulk buyers in Bangladesh due to LC issues and high inventories. Indicative offers for EU/UK shredded are at $405-410, but there is no buying interest."

Turkiye: Turkish deep-sea imported scrap prices remained stable, with HMS (80:20) assessed at $372/t CFR. However, market sentiment was bearish, as mills continued to pressure European recyclers while delaying bookings due to weaker domestic rebar sales.

Baltic and US recyclers are targeting $375-380/t CFR, but these prices are proving unworkable, as mills are reluctant to commit to new scrap orders due to sluggish rebar demand. Turkish mills are now offering rebars at $590-600/t FOB, down from last week's $655/t, contributing to the softer sentiment in the scrap market. Overall, sellers are facing increasing pressure from Turkish buyers.

Price assessments

India: UK-origin shredded scrap indicatives remained stable d-o-d at $400/t CFR Nhava Sheva.

Pakistan: UK-origin shredded indicatives edged down by $5/t to $400/t CFR Qasim compared to the previous day.

Bangladesh: UK-origin shredded prices were at $403/t CFR Chattogram, down by $2/t d-o-d.

Turkiye: US-origin HMS (80:20) bulk prices remained unchanged d-o-d at $372/t CFR Turkiye.