South Asia: Imported ferrous scrap offers remain range-bound d-o-d
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The South Asian ferrous scrap market remained range-bound today. In India, activities slowed due to bid-offer disparities and impact of the ongoing elections and their ensuing results. In Pakistan, inquiries have improved, but negotiations were underway due to tight cash flows and the upcoming Eid holidays, which are affecting buying decisions alongside low production rates. Meanwhile, in Bangladesh, buyers have slowed their purchasing of imported scrap due to a significant increase in freight rates, making it more challenging to source material, especially from regions like Hong Kong, Malaysia, and Japan.
Overview
India: In India, market activities were sluggish today as buyers adopted a wait-and-see approach due to the ongoing elections and their outcomes. Additionally, a bid-offer disparity was observed, resulting in no major deals being made. Shredded scrap offers from the US and UK/Europe were assessed at $415-420/tonne (t) CFR Nhava Sheva, while buyers aimed to secure material at lower prices at around $410-412/t CFR. HMS (80:20) offers from the UK/Europe and West Africa were reported at $395-400/t CFR, but buyers' bids were below these levels, ranging from $390-395/t CFR.
Pakistan: Market activities for imported scrap have improved in Pakistan, with buyers actively inquiring about offers. However, tight cash flows and the upcoming Eid holidays are impacting buying decisions, alongside low production rates of around 30-35% in the overall industry. Current offers of shredded scrap from the UK/Europe are heard at $420-423/t CFR Qasim. A trader commented, "The market is not great right now, so we are not making any bookings. It's too risky. We hope for a business-friendly budget and a significant reduction in interest rates since inflation has dropped to 14%. With current interest rates at 22%, the economy has suffered. We expect a 6% decline in interest rates over the next year, but it will be gradual."
A steel mill official informed, "We have only two working weeks in June. From 15 June onwards, it will be a holiday mood due to Eid. With many holidays in the past few months, payment flows are very tight. We expect an interest rate adjustment from the Monetary Policy Committee which will help ease funding issues. Production levels are not more than 30-35% in the industry."
Bangladesh: Bangladeshi buyers have slowed their purchasing of imported scrap due to rising freight rates. Materials from the UK and Europe were already considered unviable due to high freight costs, prompting buyers to target nearby origins. However, freight rates have increased by 1.5-2 times in the last few weeks, making it even more difficult for buyers to source material, particularly from Hong Kong, Malaysia, and Japan. Offers of Australian-origin shredded scrap were heard at $425-430/t CFR Chattogram, while HMS 90:10 was offered at $405/t and HMS (80:20) at $390-395/t CFR.
Turkiye: At the beginning of this week, Turkish steel producers have observed no significant improvement in the finished steel segment. Consequently, market conditions remained unchanged, and there is little expectation among industry players of major changes in scrap prices in the near term. The mills are preparing to replenish stocks ahead of the June festive period, while exporters are maintaining firm prices amidst sluggish collections. Offers remained range-bound for US-origin HMS bulk at $378-380/t CFR Turkiye.
Price assessments
India: UK-origin shredded scrap indicatives were assessed at $417/t CFR Nhava Sheva, up by $1/t compared to the last closing on Friday.
Pakistan: UK-origin shredded indicatives were assessed at $420/t CFR Qasim d-o-d, up by $1/t compared to the last closing.
Bangladesh: UK-origin shredded prices edged up by $1/t to $421/t CFR Chattogram.
Turkiye: US-origin HMS (80:20) bulk prices remained stable at $380/t CFR Turkiye.
