South Asia: Imported scrap offers inch up in India, Pakistan despite limited inquiries

The South Asian ferrous scrap market displayed a mixed trajectory today, marked by a slight uptick in offers despite minimal inquiries. Indian buyers maintained a cautious stance towards acquiring fresh scraps from the seaborne market, driven by the presence of alternative metallic options and significant price differences. Pakistani and Bangladeshi buyers reduced their purchases amid a slowdown in the domestic steel market and in anticipation of lower offers.

Shredded scrap offers saw a slight increase of $4/t in India, a $2/t rise in Pakistan, and remained steady in Bangladesh. Conversely, bulk US HMS (80:20) offers to Turkiye declined by $2/t d-o-d.

Market overview

India: Indian buyers remained hesitant to book scraps from the seaborne market due to subdued demand and significant price disparities between offers and bids. Indicative offers for shredded scrap from Europe were priced at $415-425/t CFR Nhava Sheva, while bids remained lower, around $400-405/t CFR. Similarly, offers for HMS (80:20) scraps from Europe were quoted at $390-395/t CFR, with bids falling around $380-385/t CFR.

A major Indian bulk scrap trader noted, "Following the news of the iron ore export duty, there seems to be some positive sentiment building in the bulk scrap market. I've heard inquiries starting to emerge, but Indian bulk inquiries have notably declined, with only Bangladesh showing active interest in bulk bookings within South Asia currently. It's been quite some time since there has been active buying from India, so hopefully, we'll see some positivity returning soon."

A representative from a trading company commented, "The current market suggests that shredded scrap should not exceed $400/t. However, indicative prices from the EU/UK are higher at $430-435/t, creating a $30/t gap that makes it economically unviable."

Pakistan: Pakistani buyers remained relatively active, procuring imported scrap on an as-needed basis, given the subdued demand for domestic finished steel. Indicative offers for shredded scrap from Europe were assessed at $440-445/t CFR Qasim.

In the domestic market, local scrap prices were reported to be around PKR 160,000/t ($573/t) ex, while rebars were being sold at approximately PKR 264,000-265,000/t ($945-949/t) ex.

A steel mill official commented, "The local market is slow, with minimal inquiries, and scrap importers are purchasing material only as needed. Offers from Europe and the UK are hovering in the range of $440-445/t, varying depending on the quality."

Bangladesh: Bangladeshi buyers slowed down imported scrap booking on anticipation of a drop in offers. Indicative offers for shredded scrap from Australia were assessed at $430-435/t CFR Chattogram and HMS (80:20) were heard at $410-415/t CFR.

Turkiye: Turkish deep sea imported ferrous scrap prices remained steady at $418/t CFR, unchanged from the previous day. Tradable values for premium or US/Baltic-origin HMS (80:20) varied between $415-$420/t CFR, with most transactions clustered around $418/t CFR. The market witnessed continued inactivity as Turkish mills grappled with sluggish domestic rebar sales and a weakening lira.

Market sources attributed the subdued trading atmosphere to uncertainties surrounding scrap prices, limited rebar sales, and challenges in reducing HMS collection costs. HMS collection costs in the Benelux region surged to as high as Euro 355/t delivered to docks, strengthening w-o-w. Meanwhile, rebar stockists and traders remained cautious due to confusion over a recent government regulation regarding VAT refunds, contributing to a slow domestic market environment.

Despite weak demand domestically and in export markets, Turkish mills maintained their rebar offers. Turkish exported rebar was assessed at $610/t FOB, with most transactions occurring at this level and offers ranging from $610-620/t FOB. Overall, ongoing uncertainties were dampened market sentiments, making participants hesitant to engage in transactions.

Recent deals

• A small parcel of 250-t of HMS scraps were sourced from Yemen at $360-365/t CFR Mundra.
  
  
• Approximately 500 t of HMS were booked from the US at $375/t CFR Mundra.
  
  
• Around 1,400 t of HMS 1 were booked from Kuwait at $420-425/t CFR Qasim.
  
  
• About 3,500 t of shredded scraps were booked from Europe at $443-445/t CFR Qasim.
  
  
• A parcel of 1,500 t of PNS scraps were booked from Malaysia at $438/t CFR Chattogram.
  
  

Price assessments

India: UK-origin shredded scrap indicatives were assessed at $420/t CFR Nhava Sheva, up by $4/t d-o-d.

Pakistan: UK-origin shredded scrap indicatives were assessed at $442/t CFR Qasim, up by $2/t d-o-d.

Bangladesh: UK-origin shredded scrap prices were assessed at $434/t CFR Chattogram, stable d-o-d.

Turkiye: US-origin HMS (80:20) bulk prices were assessed at $416/t CFR Turkiye, down by $2/t d-o-d.

Outlook

Imported scrap offers are expected to exhibit volatility across different markets. In India, offers are anticipated to stay high. However, if prices become more favourable, buying activity may increase, particularly considering the availability of other cost-effective metallics in the domestic market. Conversely, in Pakistan, a range-bound trend is foreseen, reflecting a purchasing approach based on immediate requirements. On the other hand, Bangladesh is expected to witness a slight correction in scrap prices as buyers explore alternative origins, moving away from European sources.