South Asia: Imported ferrous scrap market under pressure on limited buyer activity

The South Asian scrap market remained sluggish, with limited buyer activity across India, Pakistan, and Bangladesh. In India, buyers were hesitant to make bulk bookings, waiting for prices to bottom out amid the recent downturn in the Turkish market. Pakistan's market was similarly slow, impacted by the rainy season and delayed payments, while in Bangladesh, steel mills are postponing significant purchases until October due to weak infrastructure demand. Despite the overall bearish sentiment, there were hints of a possible rebound, particularly in Turkiye, where recent price declines have led to speculation that market conditions could improve if certain factors, such as cancellations of China-origin billet orders, come into play.

Overview

India: Demand for imported scrap remained sluggish as buyers showed little interest in current offers. Many are holding off in anticipation of lower prices following the recent downturn in the Turkish market. Additionally, the availability of more cost-effective domestic alternatives has kept buyers away from the seaborne market. Indicative offers for shredded scrap from the US and UK/Europe hovered around $395-398/t CFR Nhava Sheva, while buyers' expectations were even below $390/t CFR. HMS (80:20) offers were at $370-375/t CFR levels.

A steel mill official from southern India remarked, "At the current price level, there's little interest in booking imported scrap, as domestic scrap remained a viable option. However, if prices drop to around $365/t, we could see some good deals from India."

A market participant shared his thoughts when inquired about bulk bookings: "We doubt Indian buyers will show much interest in bulk purchases, especially with quotes hovering around $375/t for shredded and $365/t for HMS. Major bulk procuring companies in India are waiting for prices to hit the bottom, which we might see by September, followed by a potential rebound." The participant further said: "Right now, the focus isn't on the current prices but rather on identifying the optimal levels that would facilitate better trade flow. The impact of Turkiye's low price levels has led Indian and Asian buyers to set their quotes without fully accounting for freight costs and other expenses, making the market more challenging for suppliers."

Pakistan: Pakistan's imported scrap market reflected a cautious and sluggish sentiment. Buyers largely adopted a wait-and-see approach, anticipating stable prices while grappling with the ongoing impact of the rainy season, which has dampened domestic steel demand. Delayed payments continued to strain cash flows, further slowing market activity. Indicative offers for shredded scrap from the UK/Europe were assessed at $395-400/t CFR Qasim. Meanwhile, HMS (80:20) offers from the UAE were heard at around $380-382/t CFR levels.

Bangladesh: Market activity in Bangladesh remained sluggish due to a slowdown in the steel market, driven by subdued construction and infrastructure activities. Additionally, as per market participants, a major Bangladeshi steel mill reportedly has sufficient stock and is unlikely to make large purchases until October.

Indicative offers for shredded scrap from the UK/Europe were reported at $410-415/t CFR Chattogram, with HMS (80:20) offers at $395-400/t CFR.

Turkiye: The Turkish imported ferrous scrap market experienced continued pressure, as prices dropped further. A US-origin deal was heard to have been concluded by a Marmara mill for HMS (80:20) scraps being booked at $360/t CFR, marking a $3/t decline. This deal highlighted the intense buy-side pressure on recyclers, who are struggling to meet the mills' demands. A similar deal for US-origin scrap was also confirmed at the same price level. Market sentiment remained bearish, with some participants suggesting that prices could dip even further to $350/t CFR in the near term due to a significant supply overhang. This oversupply is partly due to recyclers collecting material at higher costs in previous weeks, leaving them vulnerable to the current price downturn.

However, there was a glimmer of hope as unconfirmed reports surfaced about potential cancellations of China-origin billet orders. If these cancellations materialise, it could improve demand for ferrous scrap imports, leading to a possible market rebound. Despite this, most market participants remained cautious, with some advising sellers to hold onto their material as the situation unfolds.

Price assessments

India: UK-origin shredded scrap indicatives were assessed stable at $398/t CFR Nhava Sheva d-o-d.

Pakistan: UK-origin shredded indicatives remained stable assessed at $398/t d-o-d, CFR Qasim.

Bangladesh: UK-origin shredded prices were assessed at $413/t CFR Chattogram, down by $1/t d-o-d.

Turkiye: US-origin HMS (80:20) bulk prices were at $360/t CFR Turkiye, down by $3/t d-o-d.