South Asian scrap market witnesses slowdown amid seasonal impact, economic challenges - 2 Sep'24

The South Asian ferrous scrap market is going through a quiet phase as seasonal factors and economic uncertainties impact trade across the region.

In India, monsoon-related slowdown and a bid-offer mismatch have kept demand for imported scrap sluggish, though suppliers anticipate a potential rebound in the coming weeks. Pakistani buyers, cautious after recent bookings, are holding back amid expectations of a market correction, while in Bangladesh ongoing financial struggles and the fallout from recent floods have stalled activity.

Meanwhile, Turkiye's scrap market has also slowed as mills remain hesitant about placing new orders, keeping prices stable for now.

Overview

India: In India, the demand for imported scrap has remained slow due to a gap between bids and offers, alongside a seasonal slowdown in the domestic steel market during the monsoons.

However, suppliers feel that prices have almost bottomed out and anticipate an improvement in demand after mid-September, as weather conditions improve and pent-up demand kicks in ahead of winter.

Current offers for shredded scrap from the US and the UK/Europe are around $385-395/t CFR Nhava Sheva, while HMS (80:20) is offered at $370-375/t CFR.

A supplier said, "We expect the Indian market to stay stagnant for the next two weeks with no significant changes. But after September 15 or 20 September, we anticipate domestic scrap prices to rise by INR 1,000-1,500/t, leading to a gradual increase in demand. With winter approaching and prices near the bottom, demand should improve."

A buyer based in north India said, "The market is cold, and we're not buying imported scrap. We're planning a five-day shutdown starting 15 September. Finished steel sales are slow, auto numbers are down, and we have a month's worth of finished steel inventory and 10 days of scrap inventory."

Pakistan: Pakistani buyers have adopted a cautious "wait and see" approach after a series of bookings last week, anticipating the market to stabilize. Although offers have slightly increased due to higher quotes from suppliers, buyers remain hesitant, lacking confidence in the current price levels amid expectations of a potential drop, following global trends. Additionally, the ongoing rainy season has slowed construction activities, further dampening steel demand in the market.

Indicative offers for shredded scrap from the UK/Europe were reported at $395-405/t CFR Qasim.

Bangladesh: Bangladesh's imported scrap market remained quiet today due to a seasonal slowdown and the lingering effects of recent floods. Market participants also reported that buyers are grappling with severe financial challenges, making it difficult to open LCs, even for previous orders.

Indicative offers for shredded scrap from the UK/Europe were assessed at $400-405/t CFR Chattogram, while HMS (80:20) was quoted at $390-395/t CFR.

Turkiye: Turkiye's imported scrap market saw a noticeable slowdown as business activity tapered off towards the end of the week. Negotiations were sluggish, with no new deals reported. Sellers held firm on their prices, but Turkish mills were cautious, delaying new orders.

US scrap suppliers aimed for prices above $365/t CFR for HMS (80:20), but uncertainty remained about the mills' scrap needs for September, depending on finished steel sales. Due to the lack of fresh contracts, the daily assessment of bulk HMS (80:20) from the US stayed steady at $364/t CFR Turkiye.

Price assessments

• India: UK-origin shredded scrap indicatives remained stable at $390/t CFR Nhava Sheva from the last closing day on Friday.
  
  
• Pakistan: UK-origin shredded indicatives unchanged at $400/t CFR Qasim from last closing day.
  
  
• Bangladesh: UK-origin shredded prices were assessed flat at $400/t CFR Chattogram from the last closing day on Friday.
  
  
• Turkiye: US-origin HMS (80:20) bulk prices edged down by $1/t at $364/t CFR Turkiye from the last closing day.