South Asia: Indian imported scrap buyers muted on soft downstream demand

The South Asian ferrous scrap markets faced a range of challenges. In India, the demand for imported scrap remained low due to sluggish finished steel sales, leading to a continual decline in prices. Pakistani steel mills saw minimal trading activity as uncertainty persisted, which limited scrap procurement. In Bangladesh, the rainy season and increased freight charges slowed down imported scrap buying. Meanwhile, the Turkish scrap market maintained stability with some imported deals heard from Europe.

Overview

India: In India, the demand for imported scrap remained muted today due to subdued finished steel sales in the domestic market, leading to a continual fall in prices. For instance, Indian tier-1 mills have announced rebar list prices for early-July 2024 dispatches at INR 55,000/t ($659/t) ex-Mumbai, down by INR 1,000-1,500/t ($12-18/t) from the INR 56,000-56,500/t ($671-677/t) seen at the end of June, sources informed BigMint.

Additionally, BigMint's daily assessment of IF-route rebars witnessed a correction of INR 100-500/t across markets today. Steel mills are holding ample inventories and ready stocks; however, demand remains sluggish due to a lack of new project announcements and the rainy season impacting demand.

Offers for shredded scrap from the US and UK/Europe hovered at $410-412/t CFR, while buyers are asking for prices below $405/t CFR, creating a significant bid-offer disparity. A trader commented, "There is a lot of fund crisis in the market. Earlier, buyers who kept 20,000-25,000 t of scrap inventory are now only keeping 5,000 t. They need material but due to subdued finished steel sales, they are not buying scrap."

"There is excess production compared to demand, and people are holding huge stocks," the trader added.

Pakistan: Pakistani steel mills experienced minimal trading activities today, the first day of the week, due to a lack of clarity. Rebar sales have been slow, resulting in scrap procurement getting limited to fulfilling immediate requirements. Indicative offers for shredded scrap from the UK/Europe were assessed at $425-428/t CFR Qasim, while offers from the US were around $418-419/t CFR.

Bangladesh: In Bangladesh, imported scrap buying remained moderate due to the rainy season, which resulted in a slowdown in domestic rebar sales. Additionally, increased freight charges have made it difficult for buyers to procure scrap from major Southeast Asian countries. Indicative offers for shredded scrap from the UK/Europe were assessed at $424-428/t CFR Chattogram, while HMS (80:20) was around $400/t.

A trade source revealed, "Freight charges have drastically increased. Most mills are under maintenance shutdown, and key mills are now eyeing bulk scrap deals."

Turkiye: The Turkish scrap market remained stable with a couple of imported deals heard from Europe. An European supplier sold a bulk cargo comprising HMS (80:20) at $384/t CFR Turkiye to a Samsun province-based mill. A supplier based in north Europe sold a bulk HMS (80:20) cargo again at $384/t CFR to a mill in the Osmaniye region in Turkiye.

Price assessments

India: UK-origin shredded scrap indicatives were assessed at $411/t CFR Nhava Sheva, down by $2/t compared to last closing on Friday.

Pakistan: UK-origin shredded indicatives edged down by $2/t to $426/t CFR Qasim, compared to last closing.

Bangladesh: UK-origin shredded prices edged down by $1/t to $424/t CFR Chattogram, compared to last closing.

Turkiye: US-origin HMS (80:20) bulk prices were assessed at $390/t CFR Turkiye, unchanged.