South Asian imported scrap market sluggish amid heavy rainfall, currency concerns

The South Asian imported scrap market witnessed sluggish activities towards the weekend, as heavy rainfall in many regions slowed down transactions. Pakistan- and Bangladesh-based steel producers are struggling to get letters of credit (LCs) from banks, which is further suppressing demand. Turkish steel producers remain quiet after a couple of deals were concluded at lower prices.

Market Overview
India: In India, scrap buyers are witnessing tardy negotiations, as demand remains weak. However, imported scrap offers have edged down on slow demand. Due to the flood-like situation in north Indian states and congestion on highways, it is very difficult to deliver goods. Traffic jams are rampant on highways and transporters are not being allowed to continue working in risky conditions.

"Conditions are not favourable. Also, the transportation of raw materials has been affected due to heavy rainfall," said a scrap trader.

On the other hand, steel producers are expecting prices of semis to remain under pressure on account of a slight rise in inventories of both semis and finished long steel.

Pakistan: Pakistani steel producers are waiting for a clear market direction. Many buyers are reluctant to book any fresh material. Yet, small-parcel deals were heard concluded. Interestingly, suppliers are not aggressive in selling material at low levels.

Bangladesh: The imported scrap market in Bangladesh continued to remain silent. The LC issue, dull demand, heavy rainfall, and liquidity crunch weigh down on scrap demand. Negative market sentiments have kept scrap buyers out of the market.

Turkiye: Prices for imported scrap in Turkiye continue the downward trend as steelmakers are reluctant to start negotiations with scrap suppliers. This is because they are under pressure due to low finished and semi-finished steel demand. Some insiders believe that producers will soon be forced to cut production further, given the current market condition.

Recent deals

• UK origin 2000 t of shredded was sold at $405/t CNF Qasim.
  
  
• Around 1,000 shredded was sold at $410/t CNF Qasim last week.
  
  
• Heard 2000t of UK shredded sold at $405/t CFR Vizag.
  
  
• USA origin 500t Turnings sold at $340/t CFR Chennai.
  
  

Price assessments

India: UK-origin shredded scrap offers stand at $404/t CFR Nhava Sheva, down d-o-d.
Pakistan: UK-origin shredded scrap offers are at $410/t CFR Qasim, unchanged d-o-d.
Bangladesh: Offers for UK-origin shredded scrap were at $435/t CFR Chattogram, unchanged d-o-d.
Turkiye: US-origin HMS 1&2 (80:20) prices stood at $370/t CFR Turkiye, unchanged d-o-d.

Outlook
The South Asian imported scrap market remains uncertain, as the current conditions are likely to continue to weigh down demand. However, if the weather improves and the currency issue is resolved, there could be some rebound in demand in the coming weeks.