South Asia: Imported ferrous scrap offers see mixed trend d-o-d with limited buying activity

The South Asian ferrous scrap offers showed mixed trend today. Indian buyers were cautious with European shredded scraps, while active offers from Africa for HMS gained traction. Ramadan in Pakistan slowed purchasing, while Bangladeshi buyers shifted to bulk buying due to competitive pricing. Turkish deep sea import prices stabilised as sellers anticipate restocking, influenced by steel rebar price adjustments.

Shredded scrap offers edged up by $2/t in India, while remained unchanged in Pakistan and Bangladesh. Bulk HMS (80:20) offers from the US to Turkiye also remained unchanged d-o-d.

Overview

Indian scrap importers are currently hesitant to secure shredded scraps from Europe due to price differences. However, there have been active offers noted from Africa for HMS, with a few buyers opting to book in the $375-380/t CFR range.

According to a trading house representative, there has been robust booking activity in the past 5 to 6 days, although inquiries have slowed today. Reports indicated that HMS from West Africa and South America, totalling approximately 3,000-4,000 t, were sold at $375-385/t CFR Chennai. In the Indian market, shredded scrap from the UK/EU remained viable at $400/t, given the prevailing demand. However, some suppliers are aiming for $390-392/t for US materials. Notably, there is a surplus of offers from West Africa and Brazil/South America compared to those from the UK or US.

A steel mill mentioned that they have temporarily halted bookings until 31 March due to the financial year closure. Moreover, buying interest is subdued at the moment, likely due to the upcoming Holi festival and elections in April.

In Pakistan, buyers have significantly reduced their purchases due to the ongoing Ramadan. Market activities during Ramadan are typically limited due to religious beliefs. Additionally, the domestic rebar market has remained sluggish, impacting scrap consumption within the industry. Indicative offers for shredded scrap from Europe have been reported at $410-415/t CFR.

A representative from a steel mill commented on the situation, stating, "We have observed a sharp decline in prices, from $445/t last month to $410/t now, largely influenced by global scrap market conditions."

In terms of market projections, the steel market in Pakistan is expected to remain sluggish. Recent IMF reviews have highlighted high interest rates, reaching as high as 22%, which have significantly impacted the construction sector. As a result, activity in the sector has almost come to a standstill. However, there is optimism that conditions may improve once interest rates begin to decrease, which is anticipated sometime after June 2024.

In Bangladesh, purchases have slowed due to challenges in opening letters of credit (LCs), along with softened sentiments in the steel market. Additionally, there's a noticeable shift in interest towards bulk quantities rather than containers, primarily due to more favourable pricing, particularly from the US and Australia. Indicative offers for shredded scrap from the UK/Europe were assessed at $410/t CFR Chattogram, while HMS (80:20) was heard at $395-400/t CFR.

Turkish imported ferrous scrap prices remained stable with sellers anticipating restocking soon, potentially driving prices higher. Offers of HMS (80:20) scrap stood at $380/t CFR. Tradable values for US/Baltic-origin HMS (80:20) were around $379-$385/t CFR. Market sentiment improved with Kardemir lowering its steel rebar list price, prompting bullish sentiment for scrap imports. Expectations of deals being reported later in the week or early next week persisted, with some uncertainty about price acceptance by the US sellers.

Recent deals:

Around 1,000 t of PNS from Hong Kong was sold at $432/t on a CFR Chattogram basis.

Around 100 t of UAE-origin PNS was sold at $415/t on a CFR Chattogram basis.

Around 1,000-1,500 t of West African HMS was sold at $375-378/t on a CFR Chennai basis.

Approximately 2,000 t of South American HMS was sold at $380-385/t on a CFR Chennai basis.

Price assessments

India: UK-origin shredded scrap indicatives were assessed at $407/t CFR Nhava Sheva, up by $1/t d-o-d.

Pakistan: UK-origin shredded scrap indicatives were assessed at $413/t CFR Qasim, unchanged d-o-d.

Bangladesh: UK-origin shredded scrap prices were kept unchanged at $410/t CFR Chattogram, d-o-d.

Turkiye: US-origin HMS (80:20) bulk prices were assessed stable at $380/t CFR Turkiye.