South Asia: Imported scrap market continues downtrend

The imported scrap market in the South Asian region continued to witness a downtrend, owing to limited trade activities and absence of buyers. Interestingly, Indian buyers are looking for other origins as prices are more competitive. Pakistani and Bangladeshi buyers are quiet on liquidity issues and restrictions on opening a letter of credit (LC).

India

Some Indian scrap importers agreed to sign contracts at discounts. Most buyers are waiting for further price reductions as domestic demand for finished steel has weakened. Most customers are waiting for the scrap prices to decrease further. Lack of demand and buying inquiries due to the downward correction in semi-finished steel prices and limited trading in finished steel weighed on scrap prices.

"Imported scrap market seems uncertain owing to a deemed approach from buyers, expecting further price drop. At this juncture, everything depends on Turkiye's next buying cycle," said a market insider.

"Buyers are waiting for below $400/t price level for the shredded material, as sponge iron is more feasible as of now," said a scrap trader.

Pakistan

Pakistan's imported scrap market sentiments were subdued, in the absence of scrap buyers. Dull finished steel demand and restricted LC openings from banks slowed down trade activities. Further, buyers are looking to procure domestic material as per their requirements, which is more cost effective, considering the current market scenario.

A depreciated national currency kept the market situation uncertain. Currently, PKR is at 285.1 per US dollar.

Bangladesh

Imported scrap offers are limited in the Bangladesh market, as buyers are showing less buying interest. The LC issue weighed down on the imported scrap trade. However, buyers are looking for the imported material ignoring UK/EU origins.

On the other hand, steel producers are facing problems with fund flow, due to limited demand from downstream markets.

Turkiye

Turkish steel producers stayed away from deep-sea import scrap bookings, waiting for better terms and demand for finished steel. Negotiations were absent in the ferrous scrap market. The mills are showing resistance to accepting the current scrap offers amid non-stop lira devaluation against the greenback. Currently, the lira is being traded at 20.8 against the dollar.

On the other hand, the demand for finished longs is still sluggish, only sporadic sales heard.

Recent deals

• Yemen-origin LMS and HMS, 1000 tonne (t) each, were sold at $360/t and $410/t CFR, respectively.
  
  
• 1,000 t of LMS bundles from Yemen were sold at $365/t CFR.
  
  
• 1,000 t of HMS from Poland was booked at $432/t CFR.
  
  

Price assessments

• Europe-origin shredded scrap offers into India remained steady d-o-d at $430/t CFR Nhava Sheva, down by $5/t d-o-d.
  
  
• UK-origin shredded scrap prices into Bangladesh stood at $463/t CFR Chattogram, unchanged d-o-d.
  
  
• UK-origin shredded scrap prices into Pakistan stood at $438/t CFR Qasim, largely stable d-o-d.
  
  
• USA origin HMS 1&2 (80:20) to Turkiye is at $385/t CFR, unchanged d-o-d.