South Asian imported ferrous scrap offers continue to drop amid thin trading

• Depreciating rupee keeps trade subdued in India
  
  
• Turkish market drops to new lows on ample supplies
  
  

The South Asian imported ferrous scrap market experienced a continued downward trend, influenced by weak demand and global market dynamics. In India, subdued activity was driven by a struggling domestic steel sector and a depreciating rupee, leading to increased import costs.

Pakistan's market reflected limited buying interest, with mills operating at reduced capacities due to weak demand. Similarly, Bangladesh faced challenges with sluggish steel demand and economic instability, impacting fresh bookings.

In Turkiye, the market reached new lows, with US-origin HMS (80:20) assessed at $335/t CFR, as mills leveraged ample availability to secure lower prices.

Offers for shredded scrap from the UK/Europe edged down by $2/t in India, while remaining unchanged d-o-d in Pakistan and Bangladesh. US-origin bulk HMS (80:20) offers dropped by $2/t d-o-d.

Overview

India: India's imported scrap market faced subdued demand amid a struggling domestic steel sector and a depreciating rupee, which increased import costs. Shredded scrap offers from the US and UK-Europe were at around $370-375/t CFR Nhava Sheva, with limited buyer interest, as bids ranged from $365-370/t CFR. HMS (80:20) from Europe while material from West Africa was offered at $355-360/t CFR, but transaction volumes remained low.

The weakening rupee, approaching a near-record low of 87 against the dollar, further impacted market sentiment, making imports more expensive. Buyers were cautious, preferring alternatives like domestic pig iron, which added to the limited activity. With uncertainty looming ahead of the Union Budget, the market is expected to remain subdued in the near term.

Traders highlighted that the rising dollar value had a significant impact, increasing costs by approximately $10-12/t. Buyers showed a preference for domestic pig iron as a cost-effective substitute, further limiting demand for imported material.

A market participant mentioned a vessel discharging 28,000 t of shredded scrap at Vizag Port, with a US recycler supplying the material and the receiver acting as both an end-user and trader.

Pakistan: Pakistan's imported scrap market reflected limited buying interest, influenced by global trends and declining Turkish and Indian imported scrap offers. Additionally, weak demand compelled mills to operate at reduced capacities. Shredded scrap offers from the UK and Europe were quoted at $380-385/t CFR Qasim, with buyers showing interest at $380-383/t.

Domestic scrap prices remained stable at PKR 140,000-142,000/t ($502-510/t), while rebars were steady at PKR 240,000-242,000/t ($862-868/t).

Bangladesh: Bangladesh's imported scrap market saw limited activity as sluggish steel demand and ample inventories kept major mills away from fresh bookings. Australian shredded was offered at $375-380/t CFR Chattogram, but bid-offer gaps persisted. Bulk H2 scrap from Japan was booked at $350-355/t CFR following the Kanto tender.

Economic instability, inflation, and VAT hikes further weakened sentiment. LC openings showed slight improvement, but overall market activity remained subdued, with uncertainty likely to persist until Ramadan in March.

Turkiye: The Turkish imported scrap market slid to new 2024 lows with US-origin HMS (80:20) assessed at $335/t CFR, as mills leveraged ample availability to secure lower prices. Buyers remained cautious, targeting further drops due to sluggish steel demand and oversupply concerns.

Indicative offers for February shipments were at around $335/t CFR, but many were deemed unworkable. While bearish sentiment prevailed, some sellers expected prices to stabilise as January cargoes get cleared and prompt availability is tightened, hinting at potential scope for a recovery. The market remains torn between current oversupply and hopes for a rebound.

Price assessments

India: UK-origin shredded indicatives were assessed at $373/t CFR Nhava Sheva, down by $2/t d-o-d.

Pakistan: UK-origin shredded indicatives were assessed stable d-o-d at $381/t CFR Qasim.

Bangladesh: UK-origin shredded were assessed unchanged d-o-d at $385/t CFR Chattogram..

Turkiye: US-origin HMS (80:20) bulk edged down by $2/t d-o-d to $335/t CFR Turkiye.