South Asia: Indian scrap buyers remain silent amid bid-offer disparity, dull steel sales

The South Asian scrap market witnessed pressure, with varying demand across the region. In India, buying interest remained dull due to bid-offer mismatches and weak domestic steel sales, compounded by maintenance shutdowns at major mills. Meanwhile, Pakistani and Bangladeshi buyers remain hesitant, grappling with market uncertainties and tight cash flows. In contrast, the Turkish market helds steady, driven by improved domestic rebar demand, although buyers are still cautious as they await more favorable pricing.

Overview

India: In India, the demand for imported scrap remained sluggish due to bid-offer mismatches and weak sales in the domestic finished steel market. Shredded scrap offers from the US and UK/Europe were quoted around $385-390/t CFR Nhava Sheva, while HMS (80:20) was priced at $365-370/t CFR.

A major steel mill in northern India underwent a maintenance shutdown, partly due to the off-season, resulting in a production loss of around 4,000 t of finished steel over five days.

A southern India-based market participant remarked, "We're likely to see an upward trend not just in Chennai but across the board. The Federal Reserve's recent interest rate cut is a global game-changer. While the Indian rupee might weaken slightly, this move could push the Reserve Bank of India to lower interest rates, sparking more construction activity and boosting steel demand. With the monsoon season wrapping up, We expect the market to pick up. China's planned stimulus is another reason for optimism, and there's already a shortage of HMS in the Chennai market, signaling rising prices."

On the supplier front, a source added, "Market sentiment has slightly improved, but it hasn't yet turned into real business. The last two weeks were tough-suppliers were under pressure and some sold Australian scrap to meet commitments. Buyers are now receiving higher-priced materials from earlier bookings. There's currently an $8-10/t gap between buyer bids and supplier offers. Inquiries are there but buyers are holding off, waiting for prices to align."

Pakistan: Pakistani buyers exhibited limited interest in procuring imported scrap today, waiting for clearer market direction. The market was further pressured by sluggish domestic rebar sales, tight cash flows, and squeezed profit margins. Indicative offers for shredded scrap from the UK/Europe were around $390-395/t CFR Qasim.

Bangladesh: Bangladeshi buyers showed little to no interest in imported scrap today, mainly due to bid-offer disparities and difficulties in opening Letters of Credit (LCs). No firm offers or deals were reported from Bangladeshi buyers.

A major trader revealed, "With buyer interest being so low, we've decided to stop offering in the market for now."

Turkiye: Turkish imported scrap market remained quiet today, with prices holding steady. Offers for US-origin was assessed at $370/mt CFR, unchanged from the previous day, while offers from the US hovered at $375/mt CFR. European recyclers struggled with high costs and a strong euro, limiting scrap flow.

Despite this, domestic rebar sales in Turkiye saw an uptick, sparking optimism for increased scrap restocking soon. However, mills are holding back on purchases, hoping for lower prices, particularly from European suppliers.

Price assessments

India: UK-origin shredded scrap indicatives remained unchanged d-o-d at $389/t CFR Nhava Sheva.

Pakistan: UK-origin shredded indicatives remained stable d-o-d to $393/t CFR Qasim.

Bangladesh: UK-origin shredded prices were reported to be stable d-o-d at $400/t CFR Chattogram.

Turkiye: US-origin HMS (80:20) bulk prices remained stable d-o-d at $370/t CFR Turkiye.