South Asian imported ferrous scrap index witnesses a drop on lack of buying interest-13 Aug
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The South Asian ferrous scrap index fell today by up $10/t d-o-d. In India, buyers remained cautious, favoring local scrap due to high import prices and sluggish steel demand. Pakistan's demand for imported scrap was limited, with buyers holding off in anticipation of lower prices. In Bangladesh, political instability dampened interest, although a recovery is expected soon. Meanwhile, Turkish mills faced a slow market, maintaining pressure on prices amid weak iron ore values and supply constraints.
Overview
India: Indian buyers have largely stayed on the sidelines, opting for more cost-effective alternatives available domestically. The sluggish demand for finished steel has further dampened scrap consumption in the sector. Indicative offers for shredded scrap from the UK/Europe were assessed at $405-410/t CFR Nhava Sheva, while HMS (80:20) was priced at $375-380/t CFR.
A steel mill official in northern India commented, "There is little interest in buying imported scrap due to its INR 2,000/t higher cost compared to locally available scrap. Although there have been some distress sales and offers for UK-origin shredded and PNS scrap at $395/t CFR, interest remained low. This is attributed to weak finished steel sales. We will consider resuming imported scrap bookings only if domestic prices rise. Otherwise, we prefer to purchase locally."
Pakistan: Demand for imported scrap in Pakistan remained limited, driven primarily by the ongoing slowdown in the domestic steel market. Most buyers were holding off, expecting further price drops. Indicative offers for shredded scrap from the UK/Europe were reported at $410-415/t CFR Qasim, with buyers anticipating prices to settle between $405-410/t CFR. In the domestic market, scrap prices ranged from PKR 145,000 to 155,000/t, while rebars were priced between PKR 250,000 and 255,000/t. Notably, approximately 1,000 t of shredded scrap were booked from the UK at $406/t CFR Qasim.
Bangladesh: Bangladeshi buyers have shown limited interest in the market due to ongoing political instability. However, operations are expected to normalise next week. The latest indicative offers for shredded scrap from the UK were reported at $418-420/t CFR Chattogram, while HMS (80:20) was priced at $395-400/t CFR. A trader noted, "We are not making offers at the moment due to a lack of buyer interest. However, with banks beginning to open LCs, buying activity is likely to resume next week."
Turkiye: Turkish mills continued to exert pressure on the market, influenced by bearish expectations following recent softening. The market remained sluggish, with mills reluctant to accept higher prices due to weak iron ore prices and limited scrap supply. Although, Turkish mills showed interest in shortsea markets, cost constraints from suppliers prevented sales below $370/t CFR. A Turkish mill was reported to have booked a bulk cargo of approximately 35,000 t of HMS (80:20) from Europe at $369/t CFR.
Price assessments
India: UK-origin shredded scrap indicatives were assessed at $408/t CFR Nhava Sheva, down by $4/t d-o-d.
Pakistan: UK-origin shredded indicatives were assessed at $410/t CFR Qasim, down by $10/t d-o-d.
Bangladesh: UK-origin shredded prices were assessed at $420/t CFR Chattogram, down by $4/t d-o-d.
Turkiye: US-origin HMS (80:20) bulk prices were at $375/t CFR Turkiye, down by $2/t d-o-d.
Outlook
In the near term, imported scrap offers are anticipated to decrease due to current subdued demand in India, Pakistan, and Bangladesh. Indian buyers are expected to stay on the sidelines until domestic market conditions improve. Pakistani buyers anticipate a decline in seaborne offers amid a slowdown in the international market. Bangladesh is projected to return to normalcy next week, potentially reviving activity.
