South Asia: Imported ferrous scrap market witnesses slowdown

• Indian buyers remain cautious amid sluggish demand
  
  
• Turkish market stabilises despite bearish sentiments
  
  

The South Asian scrap market experienced a period of sluggish demand and cautious buying, driven by weak domestic steel sales and a downturn in key global markets such as Turkiye and China. Buyers in India, Pakistan, and Bangladesh remained on the sidelines, awaiting clearer market signals amid softening price trends and external economic pressures. While India saw limited activity with a resumption of bulk bookings, Pakistan's scrap market faced the impact of stricter tax regulations in the steel sector, and Bangladesh was hit by stalled construction projects.

Overview

India: India's imported scrap market remained subdued, with limited activity as buyers exercised caution. The slowdown in finished steel sales and a sharp decline in the Turkish scrap market fuelled buyer hesitancy. Shredded offers from the US and the UK/Europe hovered at $400-405/t CFR Nhava Sheva, while buyers aimed for prices at or below $400/t CFR. HMS (80:20) offers from the UK/Europe were at $375-380/t CFR, with bids closer to $370-375/t CFR.

A trader commented, "The market is quiet, and buyers are cautious due to the drop in Turkish and Chinese markets. There is a $10/t gap between offers and bids."

Meanwhile, Indian steel mills reportedly returned to bulk scrap bookings, with two cargoes from the US West Coast. These shipments, comprising a mix of HMS and shredded, were secured at $385-390/t and $400/t CFR East Coast India and are expected to arrive at Paradip and Vizag ports between mid-November and early December, though exact quantities remain unconfirmed.

Pakistan: Pakistan's demand for imported scrap remained sluggish, reflecting the slow pace of the steel market. Indicative offers for shredded scrap hovered at around $405-410/t CFR Qasim.

In a recent development, the steel industry now faces tighter tax regulations, where a minimum value of PKR 205,000/t has been set for steel product tax calculations, ensuring that at least 18% sales tax is paid. If sales are made at higher prices, taxes are adjusted accordingly. This system, developed through mutual understanding between the industry and tax department, aims to curb tax evasion by preventing underreporting of sales while maintaining market stability.

For example, selling steel bars at PKR 205,000/t would result in an 18% sales tax of PKR 36,900/t, making the total price PKR 241,900/t.

Bangladesh: Bangladeshi buyers remained largely inactive due to a slowdown in the domestic steel market and a halt in construction activities and projects. Indicative offers for shredded scrap from the UK/Europe hovered at around $405-410/t CFR Chattogram, while HMS (80:20) was offered at $390-395/t CFR.

Turkiye: The Turkish imported scrap market remained largely stable, with no new deals concluded, as both buyers and sellers adopted a cautious stance. A sharp decline in Chinese iron ore prices fuelled a bearish sentiment across the supply chain, including scrap. Deep-sea recyclers, who had been active earlier in the week, withdrew offers as Turkish mills' price expectations for HMS (80:20) hovered at around $365/t CFR, a level deemed too low by suppliers. A scrap supplier noted that, despite stable collection costs, mills are seeking lower prices to boost their margins. US HMS (80:20) was assessed at $372/t CFR, steady from the previous day, though prices could slip just below $370/t CFR, according to market sources.

Price assessments

India: UK-origin shredded indicatives edged up by $3/t d-o-d to $401/t CFR Nhava Sheva.

Pakistan: UK-origin shredded indicatives rose by $3/t d-o-d to $406/t CFR Qasim.

Bangladesh: UK-origin shredded prices stood at $405/t CFR Chattogram, up by $1/t d-o-d.

Turkiye: US-origin HMS (80:20) bulk prices edged up by $1/t d-o-d to $372/t CFR Turkiye.