South Asia: Imported ferrous scrap offers soften on lack of buying interest
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The South Asian ferrous scrap market experienced a softening in prices today due to a lack of buying interest across markets. In India, demand for imported scrap remained moderate, with buyers exercising caution amid domestic market volatility. In Pakistan, sluggish steel demand and financial constraints persisted, leading sellers to adjust rebar prices in an effort to stimulate sales. Bangladesh encountered bid-offer disparities and a slowdown in the domestic steel market, adversely affecting scrap imports.
While shredded scrap offers remained stable in India, they decreased by $2/t in Pakistan and $1/t in Bangladesh. Additionally, US bulk HMS (80:20) offers to Turkiye also saw a slight decline of $1/t d-o-d.
Overview
India: Today, the demand for imported scrap stayed at a moderate level. Buyers are showing less aggressive booking behaviour compared to the past few weeks, opting for need-based bookings due to domestic market volatility. Shredded scrap offers from the US and Europe were at $420-425/t CFR, while HMS (80:20) offers from Europe and West Africa were evaluated at $400-405/t CFR.
According to a trader source, "Considering inventory levels, buyers persist in seeking more affordable materials, not entertaining offers higher than $425/t for shredded and $405/t for HMS (80:20)."
Pakistan: In Pakistan, demand for imported scrap remained low due to sluggish steel demand and financial constraints. Sellers are reducing rebar prices to stimulate sales.
According to a trader, "Mills are feeling the pressure of high-interest rates, and they are hesitant to offer due to high domestic prices in Europe compared to Pakistan. The outlook remains tough until a business-friendly budget is implemented, which seems unlikely as the country plans to enter another IMF programme."
A steel mill official underscored the difficulties in the Pakistani market, citing sluggish demand for finished steel and financial constraints. To spur sales, sellers are cutting rebar prices, while industry production is running at a diminished capacity of 40-50%.
Indicative offers for shredded scrap from the UK/Europe hovered at around $425-430/t CFR Qasim.
Notably, around 1,300 t of shredded scrap from UK was heard to have been booked by a steel mill at around $423-424/t CFR Qasim.
Bangladesh: Bangladeshi buyers have reduced their imports of scrap due to bid-offer discrepancies and a slowdown in the domestic steel market exacerbated by adverse weather conditions. Shredded scrap from UK/Europe was offered at $420-425/t CFR Chattogram, while HMS (80:20) was priced at $400-405/t CFR.
Turkiye: Following a recent deal from the US, the Turkish deepsea imported ferrous scrap market witnessed a slight decline. An Aegean region mill reportedly secured HMS (80:20) scraps at approximately $384/t CFR Turkiye. Market sentiment among buy-side participants turned bearish in the near term, attributed to sluggish finished steel sales stemming from recent bans on steel exports to Israel and challenges in selling to Yemen, which have notably dampened buyer interest in scrap imports.
Additionally, Turkish mills were widely reported to have completed restocking for May shipments and were hesitant to make purchases for June deliveries amid uncertainties surrounding rebar sales. Concerns were voiced over lost export opportunities and the inability of other importing regions to fill the gap in demand. Utilisation rates among most mills were already at 60%-65%, leading to reduced scrap imports and exacerbating the challenging market condition.
Price assessments
India: UK-origin shredded scrap indicatives were assessed at $425/t CFR Nhava Sheva, unchanged d-o-d.
Pakistan: UK-origin shredded indicatives were assessed at $425/t CFR Qasim, down by $2/t d-o-d.
Bangladesh: UK-origin shredded prices were assessed at $424/t CFR Chattogram, down by $1/t d-o-d.
Turkiye: US-origin HMS (80:20) bulk prices were assessed at $385/t CFR Turkiye, down by $1/t.
Outlook
In the near term, imported scrap offers are expected to stay rangebound due to low demand from buyers. Meanwhile, strong domestic markets in supplying regions such as Europe are likely to keep import offers steady. Moreover, talks on restrictions and bans on scrap by multiple countries like Australia are expected to hamper buyer sentiment and international trade flows.
