South Asia: Imported scrap prices edged up $1/t d-o-d; subdued buying persists

Today, ferrous scrap prices in South Asia saw a slight increase of $1/tonne (t) across markets. However, buying interest was not significant. In India, festivities and a mismatch between bids and offers affected the appetite for imported scrap. Meanwhile, in Pakistan, purchases were driven by immediate needs, and local scrap prices, which were more appealing, resulting in fewer transactions. Bangladeshi buyers, on the other hand, continued to encounter issues related to letters of credit (LCs).

Market overview

India: In India, despite the ongoing rise in imported scrap offers from Europe, demand from downstream sectors stayed low. This is attributed to a gap between the bids made by buyers and the asking prices set by sellers. Additionally, the overall trade dynamics are affected by the holiday mood of buyers due to festivities, further contributing to a sluggish market sentiment.

Offers for shredded scrap were assessed at $410-415/t CFR Nhava Sheva, while workable levels as per buyers stood at around $405-410/t CFR. HMS (80:20) scraps originating from Europe were evaluated at $390-395/t CFR.

Pakistan: In Pakistan, buyers exercised caution in procuring imported materials due to the volatility in the domestic market and the availability of cost-effective local scrap. Moreover, challenges in opening LCs added to the caution, resulting in lower demand for imported scrap in the market today. Shredded scrap offers from Europe were heard at $410-415/t CFR Qasim.

Bangladesh: Buyers in Bangladesh continued to encounter difficulties in opening LCs, a significant factor that influenced the overall sentiment in the imported scrap market. According to sources, "Previously, we would receive 2-3 LCs per week, but now we are only getting 1 LC every 15-20 days. The quantities against these LCs are a mere 500-1,000 tonnes."

In the domestic market, scrap is currently being traded in the range of BDT 61,500-62,000/t. Rebars were evaluated at BDT 86,000-90,000/t by re-rolling mills, while tier-1 mills offered them at BDT 93,000-95,000/t exw.

Billet prices experienced an increase, reaching BDT 80,000/t, primarily attributed to limited availability and high manufacturing costs, as reported by a source from a steel mill.

Turkiye: The halt in deal activity persists as mills near completion of December shipment bookings. Some US-origin HMS (80:20) offers stood at $382/t CFR and above, while EU-origin offers were reported at $378-380/t CFR and above. Although suppliers raised prices based on recent deals, the market is relatively quiet, with many mills having already secured their needs. The overall atmosphere is optimistic for the upcoming days.

Turkish mills, needing only one or two more December shipments, responded to higher offers with counterbids. Turkish mills are actively sourcing scrap domestically, with increased HMS (90:10) collection bids at around $368/t delivered to mills in Turkiye due to limited deep-sea deal activity this week.

In a recent development, a UK origin supplier sold a cargo comprising HMS (80:20) at $379/t on a CFR Turkiye basis.

Price assessments

India: UK-origin shredded scrap offers were up by $1/t to $413/t CFR Nhava Sheva today.

Pakistan: UK-origin shredded scrap offers edged up by $1/t to $415/t CFR Qasim today.

Bangladesh: Offers for UK-origin shredded scrap edged up by $1/t to $426/t CFR Chattogram today.

Turkiye: US-origin HMS 1&2 (80:20) prices stood at $380/t CFR Turkiye, up by $1/t d-o-d today.

Outlook

Imported ferrous scrap prices in South Asian countries are predicted to remain high because suppliers from Europe and the US are holding firm on their prices. However, buying activity is expected to be restrained due to weak demand and a preference for domestic procurement, driven by cost-effectiveness, especially in India and Pakistan.