South Asia: Imported ferrous scrap offers dip d-o-d on unclear price trend, low demand

Today, the South Asian ferrous scrap market experienced a downward trend due to sluggish demand and uncertainty surrounding price trends. Offers for shredded scrap in India, Pakistan, and Bangladesh dipped by as much as $3/tonne (t) d-o-d. Steel mills and traders have adopted a cautious approach, waiting for clearer price signals, while also contending with persistent issues related to Letters of Credit (LCs) in Pakistan and Bangladesh followed by the strengthening of the US dollar.

Market Overview

India: In India, scrap buyers and traders are laying low in anticipation of a further correction in import offers. Offers for containerised shredded dropped to $435-438/t today versus $440/t CFR Nhava Sheva, yesterday.

European-origin HMS (80:20) scrap was being quoted at $420/t CFR Nhava Sheva, while PNS was coming at $445-450/t CFR.

Offers for HMS (80:20) scrap from Western Africa were coming at $415-420/t for the Nhava Sheva port and $418-422/t for the Chennai port. Meanwhile, South American HMS (80:20, hand loaded) was at $420-425/t CFR Nhava Sheva, and from Brazil, it was at $417/t CFR Nhava Sheva.

"The sudden hike during last week suggests that Indian mills may have already secured their inventories, thus, buying interest is low at the moment", a reliable source informed SteelMint.

Pakistan: Today, the ferrous scrap import market exhibited a slower pace compared to the start of the week. Offers for shredded scrap have declined as buyers exercise caution in their procurement decisions due to uncertainty surrounding prices. Offers for shredded scrap from the European region were being heard in the range of $440-445/t CFR Qasim.

A few deals were concluded at $439-441/t, thus buyers are comfortable close to $440/t CFR levels.

Furthermore, the persistent depreciation of the PKR against the US dollar, combined with ongoing challenges in opening Letters of Credit (LCs), has contributed to subdued market sentiments.

Bangladesh: The market has seen limited offers and bids, with sellers being open to negotiation only if LCs can be provided promptly. For instance, HMS (80:20) from Australia was offered at $425/t CFR, where discounts are possible if LCs can be provided within a specific timeframe say within a week. The hesitation to issue LCs by banks has been a significant challenge.

Some mills are cautiously negotiating deals, and there is hope that improved weather conditions will stimulate demand for finished and semi-finished goods in the construction sector.

Local scrap prices have been relatively declining, with HMS (80:20) at BDT 58,500/t ($533/t) and local PNS scrap at BDT 61,000/t ($556/t) ex-Chattogram. Rebar prices have shown regional variations, with Chattogram at BDT 94,000-95,000/t ($857-866/t) and Dhaka at BDT 84,000-85,000/t ($766-775/t)

The BDT (Bangladeshi Taka) has experienced depreciation, with exchange rates hovering around BDT 110 against the US dollar.

Turkiye: Turkish mills are facing difficulties regarding purchase and sales prices. With rebar prices on the decline, there's limited room for an increase in scrap import costs. This situation is keeping the scrap market in a tight range, with an indicative near-term tradable value at $370-$375/t CFR for premium HMS 1/2 (80:20).

Recent devaluations in the euro against the dollar have caught the attention of market participants. This development could potentially lead European recyclers to lower their workable price levels for scrap exports to Turkiye in the near future.

Despite the current quietness in the market, there's an expectation among industry insiders that the market could soon see some movement.

Recent deals

• Around 500 t of shredded scrap from Australia were booked at $432/t CFR Mundra
  
  
• Approximately 500 t of European-origin shredded scrap were secured at $439/t CFR Qasim
  
  
• Around 1,000 t of European shredded were booked at $435/t CFR Mundra
  
  

Price assessments

India: UK-origin shredded scrap offers were at $438/t CFR Nhava Sheva, down $2/t d-o-d.

Pakistan: UK-origin shredded scrap offers were at $442/t CFR Qasim, dropped by $3/t d-o-d.

Bangladesh: Offers for UK-origin shredded were at $448/t CFR Chattogram, down by $2/t d-o-d.

Turkiye: US-origin HMS 1&2 (80:20) prices were unchanged at $374/t CFR Turkiye.

Outlook

In the short to medium term, import offers in India are expected to remain range-bound, considering the prevailing buying patterns. However, if the depreciation of the Indian Rupee (INR) against the US dollar persists, import offers may gather momentum.

In Bangladesh, the improved weather conditions could potentially lead to a better performance in the finished steel market, offering a glimmer of positivity to the overall market outlook.