South Asia: India's imported scrap demand dullness persists amid bid-offer disparity

The South Asian scrap market experienced a challenging day, with subdued demand and varying degrees of economic and environmental pressures across the region.

In India, buyer interest remained low amid a sluggish steel market and a bid-offer disparity, while in Pakistan, the ongoing monsoon slowed construction activity, dampening rebar demand. Bangladesh's market was hit hard by widespread flooding, stricter banking regulations, and reduced factory production.

In contrast, Turkiye saw a slight uptick in deep-sea imported scrap prices, as sellers held firm despite unfavourable market fundamentals.

Overview

India: In India, demand for imported scrap remained subdued due to limited buyer interest, driven by a bid-offer disparity and a slower-than-expected steel market. Indicative offers for shredded scrap from the US and the UK/Europe held steady at $385-390/tonne (t) CFR Nhava Sheva, while HMS (80:20) offers were at $365-370/t CFR.

A seller based in western India noted, "TMT sales were better today, and mills closed bookings early. If TMT demand continues to rise, scrap demand will likely recover. However, at the moment, there are no active buyers."

Pakistan: Pakistani buyers remained quiet today, with market sentiment dampened by ongoing monsoons. According to market participants, rebar demand has slowed due to a decrease in construction activity. Indicative offers for shredded scrap from the UK/Europe were at $395-400/t CFR Qasim.

Bangladesh: Bangladesh's imported scrap market saw a significant slowdown, driven by poor rebar sales, widespread flooding, and challenges related to the newly formed government. Many factories reduced production, with some operating at just 50-60% capacity. Stricter bank regulations for letters of credit (LCs) further hampered the market, leading to decreased consumption.

Offers for HMS1 from the Dominican Republic stood at $370/t CFR, but overall demand remained weak, as market conditions continued to deteriorate.

Local scrap prices were at around BDT 50,000-51,000/t, with rebar selling at BDT 84,000/t in Chattogram and BDT 78,000-80,000/t in Dhaka.

Turkiye: Turkish deep-sea imported scrap prices inched up, driven by firm seller stances despite unfavourable market fundamentals. Indicative prices for US-origin bulk HMS (80:20) were at $364-367/t CFR. Sellers from the US, Baltic, and EU regions resisted lowering their offers, citing elevated collection costs, even though the market was under pressure from sliding iron ore prices and a weaker euro.

In the Baltic region, collection costs were reported at EUR 288/t delivered to the docks, making it difficult for sellers to soften prices.

A Baltic-based recycler mentioned, "At current price levels, suppliers were reluctant to sell material, hinting at a potential increase if a deal were made above $365/t CFR."

In the US market, sellers were hesitant to offer to Turkiye, preferring to wait for domestic price settlements. Despite the bearish factors, including weaker iron ore and US market softness, sellers' firm price expectations provided some support to the Turkish scrap market, preventing significant downward movement.

Price assessments

• India: UK-origin shredded scrap indicatives remained stable d-o-d at $390/t CFR Nhava Sheva.
  
  
• Pakistan: UK-origin shredded indicatives were down by $2/t d-o-d to $398/t CFR Qasim.
  
  
• Bangladesh: UK-origin shredded prices remained unchanged d-o-d at $400/t CFR Chattogram.
  
  
• Turkiye: US-origin HMS (80:20) bulk offers edged up by $1/t at $365/t CFR Turkiye from the previous day.