South Asia: Indian scrap offers continue to see uptick; Pakistani market optimistic on IMF's $7bn bailout

• Monsoon continues to dampen mood in Bangladesh
  
  
• Turkish imported scrap remains stable in recent deals
  
  

The South Asian scrap market presented a mixed trend today. In India, there was a noticeable increase in inquiries for imported scrap, fuelled by improving sentiments in the domestic steel market. In contrast, Pakistan's imported scrap market remained sluggish, reflecting tight cash flows and slow rebar sales. However, optimism has emerged amid the International Monetary Fund (IMF) approving a $7 billion bailout package for Pakistan. Meanwhile, Bangladesh's market experienced a slowdown due to the rainy season and ongoing floods, which affected construction activities, while Turkish imported scrap offers largely stabilised.

Overview

Improving domestic steel market props up scrap in India: In India, there has been a noticeable increase in inquiries for imported scrap over the past few days, driven by improving sentiments in the domestic steel market. Current indicative offers for shredded scrap from the US and the UK/Europe were at $385-390/t CFR Nhava Sheva, while HMS (80:20) was at $365-375/t, depending on the region and loading conditions.

An Indian importer stated, "Scrap offers to India are on the rise. The increase in ore prices, along with Chinas stimulus measures and adjustments in Fed rates, are easing liquidity issues and contributing to this trend."

A trader commented, "The market is strengthening due to better sales of TMT and billets, and prices could rise by $5/t."

A buyer noted, "While finished steel sales are solid, prices remain low, and imported scrap offers are climbing. We have a good scrap inventory and will purchase as necessary."

For southern India, offers from Australia were at $380-385/t for shredded scrap and $365-370/t for HMS (80:20). European, Polish, and South African offers were at $375-380/t for HMS (80:20), $390/t for HMS (90:10), $396-400/t for shredded scrap, and $410-415/t for busheling.

Pakistan sees optimism post-bailout package approval: Pakistan's imported scrap market was sluggish today, reflecting tight cash flows and slow rebar sales. Indicative offers for UK/Europe-origin shredded scrap hovered at $388-392/t CFR Qasim.

A steel mill official commented, "Payment delays on sales have become common, prompting many traders to undersell below costs to liquidate their inventory, which is contributing to reduced profitability. Current production levels are at just 40%."

However, optimism exists due to the International Monetary Fund (IMF) approving a $7 billion Extended Fund Facility for Pakistan, expected to improve market sentiments in the long term. This approval, along with anticipated reductions in interest rates and enhanced dollar availability, could help stabilise the economy and boost market activity moving forward.

Monsoon pulls down demand in Bangladesh: Bangladesh's imported scrap market continued to be sluggish today, impacted by the rainy season and ongoing floods, which have disrupted construction activities and government projects. Indicative offers for shredded scrap from the UK and Europe were at $395-400/t CFR Chattogram, while HMS (80:20) was priced at $385-390/t CFR.

Turkiye witnesses stability: Turkish imported scrap offers remained largely stable today, with US-origin HMS (80:20) priced at $368/t CFR. A West Marmara mill secured a bulk cargo of US scrap, including HMS (80:20) at $368/t CFR and shredded and bonus at $388/t CFR. Additionally, the same mill was reported to have booked a bulk shipment from Europe, consisting of HMS (80:20) at $361/t CFR.

Price assessments

India: UK-origin shredded scrap indicatives remained stable d-o-d at $390/t CFR Nhava Sheva.

Pakistan: UK-origin shredded indicatives remained unchanged d-o-d at $390/t CFR Qasim.

Bangladesh: UK-origin shredded prices were at $400/t CFR Chattogram, up by $5/t d-o-d.

Turkiye: US-origin HMS (80:20) bulk prices remained stable d-o-d at $368/t CFR Turkiye.