South Asian imported scrap market slows down in second half of week

The South Asian imported scrap trade witnessed slow negotiations in the second half of the week, as participants are actively watching market behaviour, after prices declined by a significant $10/tonne (t) in a recent deal concluded by a Turkish mill.

Additionally, Islamic countries like Pakistan, Bangladesh and Turkiye are likely to slow down ahead of the Muharram Ashura holidays.

Market overview

India: Imported scrap buyers in India remained active with some deals heard for HMS from West Africa and of other origins. Meanwhile, some buyers are looking for further price corrections, after the recent transaction recorded by the Turkish mill.

Some suppliers are desperate to sell their material at a workable price before the market goes down further. Yet, some yard-owners are not in a hurry to sell their material.

Pakistan

Pakistani buyers are cautious and looking for downward price corrections. Notably, steel producers are under pressure to sell their finished material at low prices (without enjoying any margin between scrap and finished steel). Further, scrap procurement from the domestic market is also slow, owing to slow finished steel demand.

Bangladesh

Buyers of containerised imported scrap have slowed down negotiations, despite prices having declined to over two-year lows. Current price levels were last seen in February 2021. However, buyers are looking for further corrections. Major mills are showing interest in bulk cargoes for post-monsoon production. "The upcoming October-February is a favourable period for the construction season. So, there is need for procurement," said a scrap trader. Around 3,000 t of HMS from Australia have been sold at $405-407/t CFR Chittagong levels last week.

Turkiye

The latest deal suggests that the downward trend in the market is likely to remain in the short term. It seems the mills will not purchase further. Domestic finished and semi-finished markets remain bearish. Hence, buyers are likely to wait and watch.

Recent deals

Around 1,000 t of Australia-origin HMS (80:20) was sold at $405/t CFR Chittagong.

Around 2,000 t of UK origin Shredded scrap was sold recently at $405/t CFR Qasim.

Price assessments

• India: UK-origin shredded scrap offers stand at $405/t CFR Nhava Sheva, inching down d-o-d.
  
  
• Pakistan: UK-origin shredded scrap offers were at $408/t CFR Qasim, unchanged d-o-d.
  
  
• Bangladesh: Offers for UK-origin shredded scrap were at $425/t CFR Chattogram, unchanged d-o-d.
  
  
• Turkiye: US-origin HMS 1&2 (80:20) prices stood at $355/t CFR Turkiye, down $5/t d-o-d.
  
  

Outlook

The imported scrap market remains uncertain, as prices are expected to continue to move down in the near term. However, if there is an improvement in demand for finished and semi-finished steel, we could see a rebound in scrap prices in the coming weeks.