South Asia: Imported ferrous scrap offers largely stable, Indian buyers show active interest

The mixed trend witnessed in the South Asian ferrous scrap market extended further today. In India, demand for imported scrap has surged, driven by a scarcity in domestic scrap and optimistic forecasts for increased steel consumption post-elections. Meanwhile, in Pakistan, subdued finished steel sales and financial constraints have dampened scrap imports, despite hopes of a post-Eid resurgence. Bangladesh is maintaining a moderate pace of demand, hampered by slow LC approvals and adverse weather affecting domestic steel demand.

Shredded scrap offers remained unchanged in India and Pakistan, but edged down by $3/tonne (t) in Bangladesh. US bulk HMS offers to Turkiye edged up by $1/t d-o-d.

Overview

India: In India, demand for imported scrap has improved due to the limited availability of domestic scrap and expectations of increased demand for finished steel after the elections. Offers for shredded scrap from the US and Europe are holding steady at around $420-425/t CFR, while HMS (80:20) from West Africa and Europe is priced at $400-405/t CFR.

Pakistan: Pakistani buyers have reduced their imports of scrap due to a sluggish finished steel sector and constrained cash flows, leading to lower scrap consumption. Despite expectations of improvement after the Eid holidays, demand has remained subdued. Market participants note that production levels of major mills are still below 50%. Offers for shredded scrap from the UK and Europe were in the range of $425-430/t CFR Qasim, with those from the UAE reported at $435-440/t CFR Qasim. HMS sheared offers from the UAE were approximately $410-415/t CFR Qasim.

Bangladesh: In Bangladesh, the demand for imported scrap has maintained a moderate pace, hindered by slow LC approvals and limited domestic demand in the steel sector due to adverse weather conditions. Indicative offers for shredded scrap from the UK and Europe were assessed at $420-425/t CFR Chattogram, while HMS (80:20) offers stood at $400-405/t CFR.

In the local market, rebar prices were reported at BDT 80,000-85,000/t ex-Dhaka, with higher rates at BDT 90,000-95,000/t. Local scrap prices were observed at BDT 58,000/t for LMS, BDT 60,000/t for HMS (80:20), and BDT 62,000/t for PNS quality scraps.

Turkiye: Turkish deep-sea imported ferrous scrap prices saw an uptick as domestic mills persisted in restocking despite sluggish rebar order books. Offers for US-origin bulk HMS (80:20) stood at $386/t CFR, marking an increase of $1/t compared to the previous day. Despite recent sluggishness in rebar sales, market participants indicated that mills needed to secure 10-15 more cargoes for May to sustain operations. Turkish rebar export offers were at $585/t FOB, while the spread between scrap and rebar prices was evaluated at $199/t, indicating potentially break-even levels for mills. Meanwhile, activity in short-sea markets remained limited, with only bonus and premium grades attracting interest from mills, while HMS grades saw little to no demand. Turkish imports of short-sea scrap at $367/t CFR, reflected the prevailing market conditions.

Price assessments

India: UK-origin shredded scrap indicatives were assessed unchanged at $426/t CFR Nhava Sheva, d-o-d.

Pakistan: UK-origin shredded indicatives were assessed flat at $426/t CFR Qasim, d-o-d.

Bangladesh: UK-origin shredded prices were assessed at $422/t CFR Chattogram, down by $3/t d-o-d.

Turkiye: US-origin HMS (80:20) bulk prices were assessed at $386/t CFR Turkiye, up by $1/t d-o-d.

Outlook

In the near term, it is anticipated that imported scrap offers will remain at elevated levels, buoyed by restocking demand from Turkiye and decreased collection rates in Europe and the US. Indian buyers are expected to persist in booking imported scrap, driven by the anticipation of heightened steel demand preceding elections and the need to restock for the forthcoming production cycle. Conversely, Pakistani buyers are likely to maintain a quiet stance for some time due to sluggish finished steel sales in the domestic market.