South Asia: Imported ferrous scrap offers show mixed trends d-o-d

The South Asian ferrous scrap market displayed a mixed trend today. Indian buyers abstained from booking fresh scraps from the seaborne market due to a gap between imported and domestic scrap prices. Pakistan buyers made purchases as per their immediate needs. The Bangladeshi market remained sluggish, and buyers encountered challenges in opening Letters of Credit (LCs).

Shredded scrap offers stayed stable in India and Bangladesh, while increased by $1/t in Pakistan. US bulk HMS (80:20) scrap offers to Turkiye decreased by $2/t d-o-d.

Market overview

India: In India, demand for imported scrap remained muted due to the substantial price gap between domestic and imported scraps. Shredded scrap offers from Europe were in the range of $410-420/t CFR Nhava Sheva, while bids reportedly dipped below these levels to around $400-405/t CFR. Shredded scrap of Australian origin was observed at $435/t CFR.

For HMS (80:20) scrap from Europe, offers were assessed at $385-390/t CFR Nhava Sheva, whereas bids were reported at $370-380/t CFR.

HMS (80:20) scraps from South America and Australia were indicated at $420/t CFR Chennai.

An official from a steel mill stated, "There is a significant gap between domestic and imported prices, making imports financially unviable, with a minimum gap of $20/t. Therefore, we will refrain from booking imported scrap until it becomes economically feasible, opting to purchase domestic scrap as needed."

A representative from a trading company mentioned, "The crucial aspect in the current market scenario is to await a more favourable window when finished steel can be sold and the procurement of scrap would pick up momentum. Presently, bulk offers into India and Bangladesh are not feasible for buyers due to issues related to cash flow and financial challenges. We are anticipating increased activity in February bookings, as there is currently no significant demand observed in the Indian market."

Pakistan: In Pakistan, the demand for imported scrap was noted to be quite moderate today, with major mills making purchases based on immediate requirements. Offers for shredded scrap from Europe were reported at $435-442/t CFR Qasim. Additionally, shredded scrap from the Middle East was heard at $450-455/t CFR Qasim, while HMS scraps were priced at $410-415/t CFR.

Bangladesh: In Bangladesh, demand for imported scrap was heard to be limited as buyers faced challenges in opening of LCs from the banks. Shredded scrap offers from Europe were heard at $435-440/t CFR Chattogram while HMS (80:20) was heard around $415-420/t CFR.

An Indian trader reported, "Bangladesh scrap offers range from $438-444/t for bulk mixed scrap, with inquiries coming in from Hong Kong, Malaysia, and Australia. However, bulk offers into Bangladesh are not feasible for buyers due to financial constraints and cash flow issues."

Turkiye: The Turkish imported ferrous scrap market experienced a downtrend today, influenced by recent deals. An Iskenderun mill concluded an EU-origin deal for 22,000 t of HMS (80:20) at $410/t CFR, and 13,000 t of shredded and bonus scrap at $435/t CFR and $430/t CFR, respectively. Additionally, a Marmara mill booked HMS (80:20) scraps from Venezuela at $413-$414/t CFR for March loading.

Turkish buyers exercised caution due to unclear price direction and sufficient existing stocks, relieving the pressure for urgent restocking. Meanwhile, EU recyclers faced challenges in lowering offers due to higher collection costs.

Price assessments

India: UK-origin shredded scrap indicatives were assessed stable at $415/t CFR Nhava Sheva.

Pakistan: UK-origin shredded scrap indicatives were assessed at $440/t CFR Qasim, up by $1/t d-o-d.

Bangladesh: UK-origin shredded scrap prices were assessed unchanged at $440/t CFR Chattogram d-o-d.

Turkiye: US-origin HMS (80:20) bulk prices were assessed at $417/t CFR Turkiye, down by $2/t d-o-d.

Outlook

Imported scrap offers are expected to exhibit volatility due to prevailing market sentiments. Indian buyers are likely to stay out of the market due to a significant price disparity. Pakistan steel mills are exercising caution in light of upcoming national elections in February, and uncertainty persists regarding Dubai scrap export duties, contributing to unclear price directions. They are awaiting decisions from officials for further clarity.