South Asia: Imported scrap offers edge up but inquiries remain limited

• Turkish, Indian markets bullish with expectations of increased demand
  
  
• Pakistan, Bangladesh witness subdued demand amid host of challenges
  
  

The South Asian imported scrap market witnessed mixed trends today, with each country navigating its own set of challenges. In India, inquiries for imported scrap have started to rise, though buyers remain cautious amid slower domestic steel sales. Pakistan's scrap demand remains sluggish, impacted by economic uncertainties and a weakened steel market. Meanwhile, in Bangladesh, demand continues to be muted due to weak construction activity and political instability. In contrast, Turkiye's scrap market has shown signs of recovery, with rising prices driven by stronger iron ore demand and favourable conditions in China.

Overview

Inquiries rise in India though buyers remains wary: In India, inquiries for imported scrap saw a gradual increase, but buyers remained cautious about committing to larger volumes due to slower-than-expected domestic steel sales. However, market participants were optimistic, expecting demand to pick up ahead of the festive season.

Shredded scrap offers from the US and the UK/Europe were assessed at $395-400/t CFR Nhava Sheva, while HMS (80:20) offers from West Africa and the UK/Europe were at $370-380/t CFR.

Demand remains limp in Pakistan: The demand for imported scrap in Pakistan remained subdued as buyers adopted a cautious wait-and-watch approach in hopes of price stability, before committing to larger volumes. Demand was already low due to the sluggish domestic steel market and delayed payments, which led to reduced production. The recent price hike has only added to the uncertainty.

Indicative offers for shredded scrap from the UK/Europe were at $395-400/t CFR Qasim.

In the domestic market, local scrap was at PKR 142,000-146,000/t exw, while rebars were priced at PKR 245,000-250,000/t exw.

Bangladesh continues to face challenges: Imported scrap demand in Bangladesh remained sluggish, driven by weak construction activity and low buying interest, particularly among rebar sellers and steel suppliers involved in government projects. Economic instability, political uncertainties, and trade route challenges further dampened demand.

Indicative offers for shredded scrap from the UK/Europe were at $405-410/t CFR, while HMS (80:20) was offered at $385-390/t CFR.

Turkiye witnesses bullish market sentiments: The Turkish imported scrap market showed signs of optimism, with US origin-HMS (80:20) increasing to $370/t CFR, up $2/t from the previous day. This rise was attributed to significantly higher iron ore prices and favourable Chinese billet offers, which have prompted sellers to withhold export offers in anticipation of better prices.

While buyers remain below the $370/t CFR mark, many sellers are aiming for $380/t CFR due to expectations fuelled by bullish market conditions. Additionally, the recent surge in iron ore prices - reflected in a jump to $108/t CFR for the 62% Fe index - indicates strong underlying demand. With Turkish mills adopting a patient stance, expecting further increases in prices, the overall sentiment in the imported scrap market remained cautiously optimistic, particularly as macroeconomic developments in China influenced dynamics.

Price assessments

India: UK-origin shredded scrap indicatives remained stable d-o-d at $398/t CFR Nhava Sheva.

Pakistan: UK-origin shredded indicatives edged up by $4/t d-o-d to $400/t CFR Qasim.

Bangladesh: UK-origin shredded prices were at $403/t CFR Chattogram, stable d-o-d.

Turkiye: US-origin HMS (80:20) bulk prices edged up by $2/t d-o-d to $370/t CFR Turkiye.