South Asia: Indian scrap buyers cautious amid price disparity; inquiries improve in Pakistan, Bangladesh

The South Asian ferrous scrap market experienced a slowdown as Indian buyers remained cautious due to significant price disparities between domestic and imported scrap. The ongoing rainy season has further slowed finished steel sales across regions.

Meanwhile, Pakistan saw increased inquiries but limited buying due to slow steel sales and high freight costs. In Bangladesh, the market has gradually recovered from disruptions, while Turkiye witnessed a slight decline in deep-sea imported ferrous scrap prices amid lower offers from European recyclers.

Overview

India: Indian buyers remained on the sidelines due to the significant price disparity between domestic scrap and sponge iron compared to imported scrap. Additionally, finished steel sales continued to slow down due to the rainy season in key regions. Indicative offers for shredded scrap from the US and UK/Europe were assessed at $410-415/t CFR Nhava Sheva, while buyers' asking prices remained lower at around $405-407/t CFR. Offers for HMS (80:20) from West Africa and the UK/Europe were at $385-390/t CFR.

A northern India-based steel mill official said, "Production cuts of 20-30% and inventory issues persist. Small and medium mills in Mandi operate five to six days a week due to slow demand and local price disparities."

In south India, a Chennai-based mill official commented, "Major mills are running at 50-70% capacity due to weak demand. HMS 80:20 and billet prices have hit a four-month low. Sponge iron use has increased to 30%, with some mills using a 50:50 ratio of sponge and scrap. Imported HMS 80:20 costs INR 31,500-32,000/t still higher than domestic offers."

A supplier stated, "The Indian market is subdued and is likely to remain so for another month until sponge iron prices stabilise. European prices are too high due to higher container freight rates, with only a few lines providing containers".

Another supplier added, "In the last two days, the global market has softened, but Indian buyers are not interested in booking imported scrap due to the price gap. Suppliers are reluctant to offer to India as Pakistan provides better realisation."

Pakistan: In Pakistan, inquiries for imported scrap have increased; however, due to slow steel sales, buying activities remain limited and on an as-needed basis. Indicative offers for shredded scrap from the UK/Europe were assessed at $428-432/t CFR.

A steel mill official said, "The market is not promising for the steel industry, and freight costs are also on the higher side. The options left for Pakistani buyers are the UAE and other Middle Eastern countries where freight costs will be comparatively less."

Bangladesh: The Bangladeshi import market has remained slow after the student protests disrupted the market, although normalcy is returning gradually.

A steel mill official stated, "Currently, there are no challenges in opening LCs, but the market remains slow due to the rainy season. Moreover, a shortage of gas has slowed down steel production, though this is gradually improving. Overall, the market remains very dull, with no major bulk buying activity seen."

Indicative offers for shredded scrap from the UK/Europe were at $425-430/t CFR Chattogram, while HMS 80:20 was at $405-410/t CFR.

Turkiye: Turkish deep-sea imported ferrous scrap prices saw a slight decline due to softer offers from European recyclers, influenced by reduced mill interest and lower collection costs in the Benelux region. Offers for US origin bulk HMS (80:20) were heard at $388/t CFR, a decrease of $1/t d-o-d. Indicative values for EU-origin HMS (80:20) ranged between $382-384/t CFR.

The drop in prices was attributed to lower collection costs in the Benelux region, which were cited at Euro 310-315/t delivered to docks, though some exporters continued to pay up to Euro 320/t. Offers for EU-origin HMS (80:20) were reported at $383/t CFR. European sentiment was slightly positive due to expectations of higher US domestic scrap market settlements, which could lead to increased US-origin HMS (80:20) values, reported between $387-$390/t CFR.

Price assessments

India: UK-origin shredded scrap indicatives were assessed at $413/t CFR Nhava Sheva, down by $1/t d-o-d.

Pakistan: UK-origin shredded indicatives were assessed at $428/t CFR Qasim, stable d-o-d.

Bangladesh: UK-origin shredded prices were assessed unchanged d-o-d at $430/t CFR Chattogram.

Turkiye: US-origin HMS (80:20) bulk prices were assessed at $388/t CFR Turkiye, down by $1/t d-o-d.