South Asia's imported ferrous scrap market active; buyers on hopes of price corrections

In the South Asian imported ferrous scrap market, several transactions were concluded by Indian buyers in the second day of the week, on 18 July 2023 (Tuesday). However, some market players are hoping for further price corrections.

Meanwhile, Pakistan- and Bangladesh-based steel mills have maintained a cautious approach, owing to unstable economic situation.

Additionally, market activities remain slow due heavy rainfall in many regions in the South Asian countries.

Market overview

India:

• The Indian imported scrap market remained active today with a few deals concluded at workable price levels. Steel producers are more interested in booking HMS grade material, while bearish demand for semi-finished and finished steel is weighing on sentiments.
  
  
• "Material supply is short at present due to currency fluctuations," said a scrap trader. "The market has tight liquidity issues and we are not getting material below existing offers," said an industry expert.
  
  
• On the other hand, domestic sponge iron prices rose on increased spot trading yesterday. Prices edged up in the range of INR 50-500/tonne (t) to INR 26,000-27,000/t in central and southern India. However, a slight decrease of INR 100-150/t to around INR 25,000/t was seen in Durgapur and Ramgarh due to lack of buying interest.
  
  

Pakistan:

• Pakistan's imported scrap market continued to remain sluggish, owing to dull finished steel demand. Demand has reduced due to the rainy season and the fact that buyers are expecting a big fall in steel prices as the dollar weakens after the IMF deal. Additionally, electricity tariff is likely to increase, which will again increase the cost of production.
  
  
• "Those who have plans for capacity expansion are now in loss," said a steel producer. Currently, the PKR is being traded at 282 against the greenback. The imported scrap market remained uncertain.
  
  

Bangladesh:

• Negative market sentiments and bearish demand have dampened imported scrap demand in Bangladesh. Steel mills are looking for price correction as the price margin is not up to expectations. On the other hand, bulk offers too, are limited in the market, owing to less interest from participants.
  
  

Turkiye:

• Market sentiment continued to remain bearish in both the deep-sea and shortsea markets, with limited market activity reported. Negotiations have been slowed down, both buyers and suppliers are not aggressive to conclude any transactions. Steel producers are now more focussed on domestic sales.
  
  

Recent deals

• 500 t of Brazil HMS has been sold at $385/t CFR Nhava Sheva.
  
  
• Premium grade South American HMS was sold at $405/t CFR Mundra for Punjab.
  
  
• 250-300 t of turnings was sold at $355/t to ICD Ludhiana.
  
  
• Around 500 t of UK shredded has been booked at $400/t CFR Qasim.
  
  
• Around 600 t of UK HMS has been booked at $370/t CFR Mundra.
  
  

Price assessments

• India: UK-origin shredded scrap offers stand at $406/t CFR Nhava Sheva, slightly up by $2/t from the last offer.
  
  
• Pakistan: UK-origin shredded scrap offers were at $408/t CFR Qasim, up by $3/t d-o-d.
  
  
• Bangladesh: Offers for UK-origin shredded scrap were at $430/t CFR Chattogram, unchanged from yesterday.
  
  
• Turkiye: US-origin HMS 1&2 (80:20) prices stood at $365/t CFR Turkiye, down by $2/t from yesterday.
  
  

Outlook

The South Asian imported scrap market remains uncertain, as market players are hoping for further price corrections. However, the recent deals suggest that there is still some demand in the region. If the economic situation improves and the dollar weakens further, we could see a pick-up in demand in the coming weeks.