South Asia: Imported ferrous scrap market softens as buyers exercise caution

The South Asian ferrous scrap market witnessed a downward trend with a slight decline of approximately $1/t in offers. In India, buyers exercised caution and the availability of cargoes at lower rates. Meanwhile, in Pakistan, buyers slowed their purchases, opting for a need-basis approach amid anticipation of further drop in offers. Additionally, Turkish imported ferrous scrap softened due to sluggish domestic and export rebar sales.

Overview

The imported ferrous scrap market in India continued to show limited activity, with buyers exercising caution due to uncertain offers. Indicative prices for shredded scrap from Europe/UK and the US ranged from $405-410/t CFR, while offers for HMS (80:20) from Europe/UK and West Africa ranged from $375-385/t CFR.

According to a trader, "The Suez Canal issue has made Europe an unviable option for imports to India. Additionally, Australia is finding better opportunities in Indonesia and Bangladesh, diverting its focus away from the Indian market. Consequently, the preferred option for imports to India remains the USA."

In Pakistan, the pace of imported scrap buying remained sluggish, with only a few buyers reported to have booked small volumes. The majority of buyers are exercising caution, anticipating further drop in offers. Indicative offers for shredded scrap from Europe/UK and the US were reportedly around $415/t CFR.

The Turkish deepsea ferrous scrap market softened due to lacklustre demand, though resistance from recyclers tempered the decrease. The market witnessed lower offers, with US recyclers flexible for April shipments but firm for March due to higher collection costs. Baltic recyclers, facing high collection costs, maintained stability around $385/t CFR Turkiye. Bids and buyers' target levels were still coming down amid concerns about very poor demand for Turkish rebar, both in the domestic and export markets. The shortsea market remained quiet as Turkish mills expected low prices, with sellers reluctant to reduce prices below $390/t CFR. Meanwhile, Turkish mills were looking to book shortsea scrap at $365-$370/t CFR.

Price assessments

India: UK-origin shredded scrap indicatives were assessed at $405/t CFR Nhava Sheva, down by $1/t d-o-d.

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

Bangladesh: UK-origin shredded scrap prices were assessed at $420/t CFR Chattogram, unchanged d-o-d.

Turkiye: US-origin HMS (80:20) bulk prices were assessed stable at $383/t CFR Turkiye.

Outlook

Imported ferrous scrap offers are expected to continue facing downward pressure as buyers foresee a trend of decline. The forthcoming general elections in India are anticipated to suppress buying activity due to projected cash flow constraints and concerns over potential policy changes. Pakistani buyers may start bookings only after offers stabilize and once downstream demand increases. Turkiye is also under pressure from sluggish rebar sales in both the domestic and export markets.