South Asia: Imported ferrous scrap market witnesses mixed trends

• Indian market rallies amid recovery in semis
  
  
• Pakistan, Bangladesh remain under strain
  
  
• Turkish market stabilises on strong rebar sales
  
  

The South Asian ferrous scrap market witnessed mixed trends. In India, demand for imported scrap is gradually picking up, driven by a recovery in the semi-finished steel sector, though buyers remain cautious. Pakistan's market continues to struggle amid weak rebar sales, but there is growing optimism following an IMF bailout. Meanwhile, Bangladesh's scrap demand is muted, with buyers facing difficulties opening letters of credit (LCs) due to economic disruptions. In Turkiye, the market has stabilised, supported by strong domestic rebar sales, though oversupply from Europe remains a concern.

Overview

Demand rebounds in India: In India, demand for imported scrap gradually picked up, thanks to the steady improvement in the domestic semi-finished steel markets. However, market participants noted that buyers are primarily focused on material that is either already in transit or expected to arrive soon.

One supplier noted, "We are not offering material in the market right now, as it is not viable for us. Traders holding large stockpiles or with material en route are able to close deals at $385-390/t, but we cannot sell at those levels."

A UAE-based trader observed, "Interest has risen slightly but not aggressively. Indian buyers are treading cautiously given the market's volatility. Domestic scrap prices remain strong, and there is no immediate rush to import. While prices are trending higher, Indian buyers are weighing other raw material costs before committing to deep-sea purchases. We expect a surge in inquiries before the festive season as companies aim to build inventory."

Indicative offers for shredded scrap from the US and UK/Europe were at $395-400/t CFR Nhava Sheva, with HMS (80:20) trading at $370-380/t depending on the region and loading conditions.

Pakistan flails amid weak demand: Pakistan's imported scrap market continued to struggle as weak rebar sales further dampened scrap demand. Indicative offers for UK/Europe-origin shredded scrap were at around $390-395/t CFR Qasim, with most mills operating at just 40-50% of their capacity. However, optimism is building following the IMF's approval of a $7 billion Extended Fund Facility for Pakistan. This is expected to enhance liquidity, reduce interest rates, and improve dollar availability, which could help stabilise the economy and drive scrap demand in the long run.

Momentum fails to pick up in Bangladesh: Bangladeshi buyers remained quiet, struggling with difficulties in opening LCs. Indicative offers for UK/Europe-origin shredded scrap stood at $395-400/t CFR Chattogram, while HMS (80:20) was priced at $385-390/t CFR.

Market participants noted, "The rainy season and ongoing floods have severely affected many regions, disrupting construction and government projects, leading to reduced production and weaker sales."

Turkish prices remain stable in recent deals: Turkish deep-sea imported scrap prices remained largely stable, driven by a US-origin deal that saw 10,000 t of HMS (80:20) booked at $368/t CFR and 20,000 t of shredded scrap at $388/t CFR by a Marmara-based mill. Despite cheaper EU-origin offers due to oversupply, Turkish mills showed a preference for US cargoes to support strong domestic rebar sales, with prices quoted at $595-610/t exw.

Turkish mills benefited from robust rebar demand, enjoying favourable scrap-to-rebar margins of $190-210/t, depending on the mill.

Despite the positive sentiment, EU recyclers faced difficulties selling locally, leading to an oversupply of scrap in the Turkish market. As the scrap-to-rebar spread tightened, market participants expected either a rise in scrap prices or a correction in rebar prices in the near term.

Price assessments

India: UK-origin shredded scrap indicatives edged up by $2/t d-o-d to $392/t CFR Nhava Sheva.

Pakistan: UK-origin shredded indicatives remained unchanged d-o-d at $390/t CFR Qasim.

Bangladesh: UK-origin shredded prices were at $399/t CFR Chattogram, down by $1/t d-o-d.

Turkiye: US-origin HMS (80:20) bulk prices remained stable d-o-d at $368/t CFR Turkiye.