South Asia: Imported ferrous scrap prices decline on limited demand
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The South Asian ferrous scrap index continued its downtrend today. In India, sluggish demand and price disparities have led to increased use of alternative materials like DRI and sponge iron, while imported scrap prices remained relatively stable. Pakistan's market is subdued due to adverse weather and cash flow issues, leading to cautious buyer sentiment. Bangladesh faced weak buying interest and political instability, which are impacting scrap prices and market dynamics. Meanwhile, Turkiye has experienced a significant drop in scrap prices, driven by recent deals and increased availability of cheaper alternatives.
Overview
India: In India, demand for imported scrap remained low due to a bid-offer disparity and sluggish finished steel sales, which led to stockpiles and increased reliance on DRI and sponge iron to minimise costs, preferring these over scrap. Indicative offers for shredded scrap from the US and UK/Europe were assessed at $395-398/t CFR Nhava Sheva, while HMS (80:20) offers were at $370-375/t CFR.
Pakistan: In Pakistan, buyers have adopted a wait-and-see approach, anticipating a stable price trend. Market activity has slowed due to the ongoing rainy season, which has adversely affected the domestic steel market. Delayed payments have also continued to strain cash flows. Indicative offers for shredded scrap from the UK/Europe were at $395-400/t CFR Qasim.
Bangladesh: Bangladesh's imported ferrous scrap experienced downtrend today due to weak buying interest and the aftermath of ongoing political turmoil. Buyers adopted a cautious stance, anticipating further price drops as offers in the international market softened. A trader said, "US bulk offers to Bangladesh have decreased as suppliers focus more on Turkiye, pushing prices down by $10-15/t compared to the last week. While major markets like Asia, Turkiye, and Southeast Asia also saw price dips, some stability is expected if buyers return with stronger bids."
According to a supplier, offers for shredded scrap from the US were at $400/t CFR Chattogram, while offers from Australia were slightly higher at $410/t CFR. Meanwhile, HMS (90:10) offers from Brazil were at $390/t CFR Chattogram.
Turkiye: Turkish imported scrap prices have plummeted to their lowest point in almost 10-months after a recent deal for US-origin scrap was finalised. A steel mill in West Marmara has purchased a bulk cargo of US HMS (80:20) scrap at about $360/t CFR Turkiye. It may be noted here that in October, 2023, US bulk HMS (80:20) prices hit a low of around $361/t CFR. The decline in Turkish imported ferrous scrap offers is driven by buy-side pressure due to the availability of cheaper Chinese and Russian billets compared to scrap.
While, BigMint's daily assessment of US origin HMS (80:20) was assessed at $363/t CFR, down by $7/t from the previous day.
Market sentiment remained bearish, with expectations of further price declines. Indicative tradable values for premium HMS (80:20) from various origins, including the US, Baltic, and the UK, ranged between $360-363/t CFR. Traders reported a market flooded with unsold inventories, leading to intense pressure on prices. With EU collection costs falling and September US domestic scrap settlements possibly dropping, the outlook for the Turkish market suggests more price pressure ahead.
Price assessments
India: UK-origin shredded scrap indicatives were assessed at $398/t CFR Nhava Sheva, down by $4/t d-o-d.
Pakistan: UK-origin shredded indicatives remained stable assessed at $398/t d-o-d, CFR Qasim.
Bangladesh: UK-origin shredded prices were assessed at $414/t CFR Chattogram, down by $1/t d-o-d.
Turkiye: US-origin HMS (80:20) bulk prices were at $363/t CFR Turkiye, down by $7/t d-o-d.