South Asia: Imported ferrous scrap prices inch up despite sluggish trade in India, Bangladesh

On Tuesday, the South Asian ferrous scrap index witnessed a slight uptick. In India, imported ferrous scrap indicative prices from Europe inched up, yet there was no firm response from buyers, with continuing bid-offer disparities. In Pakistan, prices remained slightly upward, but minimal activities in the finished steel market pressurised scrap. Bangladesh, on the other hand, remained sidelined, as buyer interest for containerised scrap offers remained dull, according to market participants. In Turkiye, the market was likely to see a rise in prices. However, no major bulk bookings were heard in the market.

Overview

India: The ferrous scrap market continued to remain bearish with shredded scrap offers currently at $388-394/t, with HMS (80:20) at $365-374/t CFR Nhva Sheva/Mundra. West African HMS offers were at $365-370/t, while Brazilian HMS 1 was at $378-380/t. Australian shredded was offered at $395-400/t, and HMS at $380-385/t CFR. In India, the levels for bulk were still on the lower side around 378-382/t for shredded, and HMS bulk levels were at $366-370/t CFR Kandla.

An official of a major mill said: "The Indian market appears to be on a downward trend, largely dependent on the economic situation in China. A significant recovery seems unlikely unless China's steel export rates increase by $40-50/t. While there has been a slight improvement in iron ore and HRC prices, the market will need to be observed over the next week to determine any shifts in sentiment."

Another trader said: "Indian buyers were pressing for $385-390/t for shredded bulk. However, sellers were reluctant to offer at this level. Turkish market sentiment was significantly influencing decisions among Asian buyers. Demand is expected to pick up in September as the rainy season would end by that time. In fact, the festival season will begin, with construction activity anticipated to improve in western and central India during this period."

In a significant development, Indian port workers' unions have called for a strike starting 28 August, pressing for pay revisions and pension benefits. The strike will affect key ports such as Vizag and Chennai from 28 August, with Nhava Sheva potentially joining on 9 September.

As per industry insiders, this action could exacerbate congestion at Asian and European ports, leading to further shipment delays and impacting global trade.

Pakistan: Imported ferrous scrap offers into Pakistan slightly rose by $3/t d-o-d. However, the majority of the buyers in the market preferred the $390-395/t levels. According to market insiders, major mills were considering reducing their finished product prices, which were currently set at PKR 240,000-245,000/t, with billet prices at PKR 210,000-215,000/t. Local scrap was priced at PKR 145,000-148,000/t, with decent availability in the market. The last import volume was approximately 5,000-5,500 t, sourced from the UK and the UAE.

Bangladesh: Bangladesh's imported ferrous scrap market remained sidelined with minimal trades reported for the day. Indicative offers for shredded scrap from the UK/Europe were reported at $402-405/t CFR Nhava Sheva, while HMS (80:20) offers were at $390-392/t CFR. A spokesperson representing a major trading house commented: "Recent sales in Bangladesh have been concluded at $395/t for shredded scrap, but buyers are now expecting prices to decline to $380-385/t." The origin of the material and final prices were not disclosed at the time of publication.

Turkiye: Turkish imported prices witnessed a slight uptick with no major purchases of ferrous scrap from the US. The slight change in prices was primarily due to a brief rebound in Chinese billet prices, which pushed up scrap prices from the US East Coast. Additionally, earlier prices may have been lower than the prevailing market sentiment, which had been shifting upward.

Price assessments

India: UK-origin shredded scrap indicative prices increased by $1/t to $391/t d-o-d CFR Nhava Sheva.

Pakistan: UK-origin shredded indicatives prices edged up by $3/t to $399/t d-o-d CFR Qasim.

Bangladesh: UK-origin shredded prices edged up by $2/t to $405/t d-o-d CFR Chattogram.

Turkiye: US-origin HMS (80:20) bulk prices were slightly up by $1/t to $361/t d-o-d CFR Turkiye.

Outlook: The Indian imported ferrous scrap market is likely to face a downtrend, heavily influenced by the recessive situation in China. Any significant recovery seems uncertain unless there is a substantial increase in China's export rates by $40-50/t. Although there has been a slight improvement in iron ore and HRC prices, it is essential to monitor the market for at least a week to gauge any potential changes in sentiments.