South Asia: Imported ferrous scrap prices continue to drop on soft buying interest
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Today, the South Asian ferrous scrap market continued to witness a decline in prices primarily due to a lack of buying interest. In India and Bangladesh, offers for shredded scrap fell by up to $2/t d-o-d, whereas prices remained stable in Pakistan and Turkiye.
Market overview
India: Demand for imported scrap in India remained muted today. Offers for shredded scrap from Europe were heard between $405-410/t CFR Nhava Sheva, while buyers' bids were assessed at $400-405/t CFR.
HMS (80:20) scrap from Europe hovered around $390/t CFR Nhava Sheva.
In the local market, particularly in the eastern region, steel mills have accumulated ample inventory and reduced their production rates by 40-50%. Consequently, they are hesitant to acquire new raw materials, leading to a decrease in scrap consumption.
Pakistan: In Pakistan, demand for imported scrap has remained sluggish today. The exchange rate uncertainties and bearish market sentiments have led to a downward trend. Shredded scrap from Europe was being offered at $405-410/t CFR Qasim.
Within the domestic market, scrap prices ranged from PKR 140,000 to 150,000/t on a cash basis. Rebars are priced at PKR 255,000-265,000/t and billets at PKR 210,000-220,000/t.
A trader commented, "In the Punjab market, steel mills have been advised by the association to suspend rebar sales for a week due to the ongoing decline in scrap prices. The market is currently marked by high uncertainty. Buyers have acquired materials at elevated prices, and these are anticipated to arrive soon, causing concerns about cost fluctuations. Moreover, the daily depreciation of the dollar and rising electricity rates have added to the overall confusion".
Bangladesh: Demand for imported scrap in Bangladesh has been constrained as buyers are facing challenges in opening Letters of Credit (LCs). Imported shredded scrap offers from Europe remained largely within the range of $420-422/t, and HMS (80:20) offers were assessed at $400-402/t CFR Chattogram.
A trader said, "The imported scrap market in Bangladesh has exhibited minimal improvement this week. Nonetheless, if prices remain in accordance with the preferences of buyers, it could serve as a source of hope for a more favourable outlook."
Turkiye: Turkish scrap import prices remained stable today despite increased seller resistance. Buyers provided indicative targets for EU-origin HMS (80:20) ranging mostly from $348/t to $355/t CFR, while sellers set their targets and offers at around $360/t CFR.
Turkish steel mills made efforts to maintain pressure on scrap import prices, as reports emerged that rebar contracts with Israel were being cancelled due to force majeure. This raised concerns about an influx of material that could potentially saturate the domestic market, leading to expectations of softening offers for Turkish rebar, both in the domestic market and for exports.
Recent deal
- A parcel 500-t of HMS (80:20) was sourced from Brazil at $395/t CFR Nhava Sheva
Price assessments
India: UK-origin shredded scrap offers were at $404/t CFR Nhava Sheva, down by $2/t d-o-d.
Pakistan: UK-origin shredded scrap offers were stable at $405/t CFR Qasim today.
Bangladesh: Offers for UK-origin shredded scrap were down by $2/t to $420/t CFR Chattogram today.
Turkiye: US-origin HMS 1&2 (80:20) prices were stable at $360/t CFR Turkiye.
Outlook
The imported ferrous scrap market is expected to continue to face headwinds with little indication of improvement across markets. In India, a significant gap between bids and offer prices, along with a lack of interest from buyers, has contributed to a pessimistic outlook. In Pakistan, market sentiment could show signs of improvement as the monetary crisis slowly subsides. Meanwhile, in Bangladesh, market activity is anticipated to pick up by the end of October as long-pending LCs will finally get cleared.
