South Asia: Imported scrap offers rise by $5/t driven by higher freight rates

The South Asian ferrous scrap market observed an upward trajectory, influenced by increased freight rates, although buying interest was constrained. In India, buyers chose to remain on the sidelines, emphasising domestic procurement. In contrast, Pakistan experienced a significant shift as preference moved towards the Middle East cargoes, driven by variations in freight rates along the Red Sea route. In Bangladesh, after elections, the market adopted a cautious approach, awaiting clarity before initiating new purchases.

Notably, shredded scrap offers witnessed a $5/t increase in India, Pakistan, and Bangladesh. In contrast, the US bulk HMS (80:20) offers to Turkiye witnessed a $2/t decline.

Market overview

India: In the Indian market, buyers are displaying a lack of interest in imported scrap, primarily due to the price differential between domestic and imported scrap, as well as delays in the arrival of previously booked materials. Indicative offers for containerised shredded scrap from Europe have been reported at $420-425/t CFR Nhava Sheva, while HMS (80:20) scraps were priced at $400-405/t CFR.

For bulk purchases, the United States is presenting HMS scraps at approximately $435-445/t CFR, shredded scrap at $445-450/t CFR, and PNS scraps at $450-460/t CFR.

An official at a steel mill commented on the situation, stating, "We are not currently seeking fresh offers, as the material previously booked has encountered delays and is expected to arrive by February."

The vessel Mv Yasa Tokyo has recently docked at Gujarat's Kandla Port, transporting a shipment of 35,070 t of mixed scraps from the US. The recipient of the scrap is reported to be Mono Steel (India) Limited, a steel mill based in Gujarat. However, details regarding the scrap's specifications and price could not be confirmed at the time of publishing this article.

Pakistan: The demand for imported scrap in Pakistan is at a moderate level. Steel mills in the region are leaning towards the Middle East market over Europe, citing the convenience of shipments from the Middle East. This preference is influenced by the recent attack on the Red Sea, causing delays in shipments from Europe. Indicative offers for shredded scrap from Europe were assessed at $440-445/t CFR Qasim, while from the Middle East it was at $445-450/t CFR.

A representative from a steel mill explained, "The surge in prices can be attributed to logistical challenges in the Red Sea region. There is a notable inclination towards scrap from the Middle East. This preference is a direct result of disruptions and rising costs linked to Red Sea logistics, which have significantly influenced market trade preferences within the scrap industry."

Bangladesh: Market activities in Bangladesh have experienced a slowdown following the elections, with buyers adopting a cautious approach due to the Red Sea crisis. Indicative offers for shredded scrap from Europe have been reported at $445/t CFR Chattogram, while HMS (80:20) is priced at $420/t CFR.

A spokesperson from a trading company remarked, "We have not sought any new offers as we currently lack fresh purchase inquiries from buyers. The Red Sea crisis poses a significant obstacle for European shippers, impacting the overall trading dynamics in this context."

Turkiye: The recent imported deal for HMS(80:20) ferrous scrap from Turkiye dropped from the previous week. Bearish sentiment is emerging in the near-term ferrous scrap market, driven by a recent softening in the US domestic prices, particularly for some grades.

Colder weather in the region is hampering scrap deliveries to domestic mills, potentially leading to increased exports to Turkiye as unsold scrap accumulates in yards. A US recycler noted a strong scrap flow in December, with the market being flat to slightly down on shred and cut grades and around $30/t down on prime grades. Rumours of slowing HRC sales and anticipated price pressure are adding to concerns as spring approaches.

Recent deals

• Around 2,000 t of shredded scraps were booked from Australia at $404/t CFR LCB.
  
  
• Approximately 50 t of HMS scraps had been secured from the Middle East at $420/t CFR Chattogram.
  
  
• Around 1000 t of HMS sold at $430/t from the Middle East at $430/t CFR Chattogram.
  
  

Price assessments

India: UK-origin shredded scrap indicatives were at $425/t CFR Nhava Sheva, up by $5/t from the last closing on Friday.

Pakistan: UK-origin shredded scrap indicatives were at $440/t CFR Qasim, up by $5/t compared to Friday.

Bangladesh: UK-origin shredded scrap prices were up by $5/t to $445/t CFR Chattogram.

Turkiye: US-origin HMS (80:20) bulk prices were assessed at $423/t CFR Turkiye, down by $2/t.

Outlook

In the short term, it is anticipated that imported ferrous scrap offers will experience volatility owing to diminished demand from key importing nations. Nevertheless, the recent Red Sea crisis has resulted in increased freight rates, acting as a factor that will likely support and stabilise prices in the market.