South Asia: Subdued demand, market uncertainty persist in scrap market
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South Asian scrap markets remained further subdued today, with weak demand and a cautious approach from buyers across the region. In India, the availability of cheaper domestic scrap and slow finished steel sales kept mills away from imported material. Pakistan's steel mills scaled back production, grappling with excess rebar inventory, while Bangladesh saw limited activity due to overstocked scrap and financing issues. Despite competitive offers for bulk scrap, hesitant buyers further dampened market activities. Meanwhile, Turkiye's imported scrap prices held steady, though potential downward pressure looms with the arrival of billet shipments and slow rebar sales expected in October.
Overview
India: Indian buyers continued to stay quiet and uninterested in imported scrap due to weak market sentiment. According to market feedback, steel mills are struggling with slow finished steel sales, leading to reduced scrap consumption. Additionally, the easy availability of domestic scrap at more competitive prices is pushing buyers to prefer local material.
A steel mill source shared, "The market is sluggish, and we expect it to stay range-bound. Finished steel inventories are high, and government funding for projects has yet to come through. Coupled with cheaper imports, this has kept raw material demand low."
A trader disclosed, "There is no space for traders to make profitable deals. Many have already incurred losses and resorted to distressed selling. Meanwhile, mills are also operating at a loss due to poor sales of finished products."
Another trader commented, "The market is depressed. Suppliers are pushing unsold material, asking us to move it. Some sales are happening with no margins or barely $1-2/tonne (t). For the past 12-15 days, we have faced significant losses. Since Monday, both northern and southern buyers have gone silent."
Indicative offers for shredded scrap from the US and the UK/Europe were at $385-390/t CFR Nhava Sheva, while those for HMS (80:20) were assessed at $370-375/t CFR.
Pakistan: Pakistan's demand for imported scrap remained moderate today, reflecting the ongoing slowdown in the domestic steel market. Some steel mills have scaled back production due to an excess of rebar inventory, leading to lower scrap consumption.
A steel mill official stated, "We have halted production due to a backlog of steel inventory. We still have around 8,000-9,000 t of unsold rebar, enough to last a month. We will focus on selling that before resuming production."
A trader reported, "Yesterday, we saw offers from suppliers at $395/t, with possible deals at $390-395/t CFR. However, immediate buyers are absent. Mills are holding onto their stocks, trying to push prices up, though there is little hope for better sales. Earlier, rebar prices were reduced to boost sales but with limited success, so now they are trying a different tactic - creating artificial scarcity."
Indicative offers for shredded scrap from the UK and Europe were reported in the $395-405/t CFR Qasim range. However, a few deals were heard at $390-395/t CFR, as suppliers face pressure from weak demand across South Asia.
Bangladesh: Bangladesh's imported scrap market remained quiet today, with demand significantly reduced. A major steel mill was heard to have been absent from the market due to sufficient scrap inventory lasting until mid of third quarter, while smaller mills faced ongoing letter of credit (LC) issues.
Another significant steel mill was reported to have about 200,000 t of unsold finished steel, adding to the sluggish demand.
Bulk scrap offers from the US ranged within $385-390/t for HMS, while Singaporean bulk was at $390-395/t. Despite the availability of bulk scrap at attractive prices, buyers are hesitant due to overstocked inventories or financing challenges.
Market activity is expected to pick up by mid-October as monsoon impacts ease and new projects potentially get the green light.
Turkiye: Turkish deep-sea imported ferrous scrap prices remained stable, with HMS (80:20) from the US assessed at $370/t CFR and EU-origin scrap at $365-366/t CFR. Sellers were firm, driven by rising collection costs, especially in the Benelux region, while Turkish mills stepped back, leading to balanced market conditions. Buyers showed little urgency, with expectations of flat near-term pricing.
Market participants noted that a slowdown in rebar sales or the arrival of previously booked billets could apply downward pressure on scrap prices in October. However, for now, there are no significant factors pushing prices up or down, keeping the market in a holding pattern.
Price assessments
India: UK-origin shredded scrap indicatives dropped by $4/t d-o-d to $391/t CFR Nhava Sheva.
Pakistan: UK-origin shredded indicatives stood at $397/t CFR Qasim, down by $3/t d-o-d from the previous day.
Bangladesh: UK-origin shredded prices edged down by $1/t d-o-d to $401/t CFR Chattogram.
Turkiye: US-origin HMS (80:20) bulk prices remained stable d-o-d at $370/t CFR Turkiye from the previous day.
