South Asia: India shows renewed interest in fresh non-European scrap bookings
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In today's South Asian ferrous scrap market, Indian buyers have shown renewed but limited interest in imported scrap, fuelled by concerns over potential inventory depletion by March. However, there was a notable preference for non-European origins due to price gaps. Meanwhile, Pakistani buyers have slowed their purchases due to sluggishness in the domestic steel market and letters of credit (LC)-related issues. Similarly, the Turkish market experienced a notable decline in recent deals, exacerbated by weak buyer sentiment amid lacklustre rebar sales.
Shredded scrap offers dipped by $1-2/t in Pakistan and Bangladesh, while they remained stable in India. Bulk HMS (80:20) offers to Turkiye decreased by $5/t compared to the previous Friday's closing.
Overview
Indian buyers are beginning to show a modest interest in imported scrap and are now seeking to secure bookings for late April and May shipments, anticipating inventory depletion by March, according to market participants. Notably, buyers are favouring non-European cargoes due to significant price disparities. Indicative offers for shredded scrap from Europe ranged from $410-420/t CFR Nhava Sheva, while HMS (80:20) offers were assessed at $385-390/t CFR.
A trader based in India remarked, "Buyer activity has picked up slightly as some believe that current inventories may run out by March, prompting a gradual resumption of bookings for April/May shipments."
Another trader mentioned, "Bulk offers for shredded scrap were reported at approximately $430/t from the US, but there was no notable buying interest. However, in containerised shipments, shredded scrap was quoted at $422-425/t. Some buyers are preparing for fresh bookings, indicating potential price movements starting last week."
A trader from the Middle East market opined, "European offers are unlikely to decrease due to low availability in Europe, high dock prices, the ongoing Red Sea issue likely persisting for another 3 months, and elevated freight rates."
Furthermore, in Pakistan, buyers have reduced their purchases of imported scrap due to sluggish sales of finished steel in the domestic market coupled with delays in opening LCs. Shredded scrap offers from Europe/the UK were evaluated at $435-440/t CFR Qasim.
Market participants said, "EU offers are at $430-440/t, but purchasing is constrained. The market is experiencing a cash crunch, and demand is low, with no deals being reported."
Turkish imported scrap prices plummeted due to weak US scrap sentiment and long-term depressed rebar demand forecasts. Expectations of lower US domestic scrap settlements for March fuelled pessimism, leading buyers to retreat. Turkish mills anticipate softer scrap prices amid the US sluggishness demand. The outlook for domestic US scrap settlements deteriorated, with expected declines of $15-20/t. Weak export rebar demand persisted, exacerbated by upcoming low-demand periods like Ramadan and the Far-Eeast rainy season. Turkish mills express disinterest in scrap imports due to lacklustre rebar sales. The market remained challenging for European recyclers, with limited transactions reported. Turkish mills are pressuring sellers in the short-sea scrap market, targeting prices below $380/t CFR. Indicative offers for Romania-origin short-sea scrap were deemed unworkable.
Market participants have noted a slowdown in finished steel demand over the past four weeks. No bulk deals have been reported since last weekend until today. However, the market price for HMS is currently below $405/t, prompting sellers to adjust to this level.
Price assessments
India: UK-origin shredded scrap indicatives were assessed unchanged at $416/t CFR Nhava Sheva compared to the last closing on Friday.
Pakistan: UK-origin shredded scrap indicatives inched down by $1/t to $435/t CFR Qasim.
Bangladesh: UK-origin shredded scrap prices were assessed at $436/t CFR Chattogram, down by $2/t.
Turkiye: US-origin HMS (80:20) bulk prices were assessed at $406/t CFR Turkiye, down by $5/t compared to the last closing on Friday.
Outlook
In the short term, imported scrap offers are expected to undergo minor adjustments, influenced by Turkiye's recent significant price decline, which often sets the tone for South Asian markets. Nonetheless, European offers may remain steady due to elevated collection costs and rising freight rates, particularly amidst the ongoing Red Sea crisis.
