South Asia's imported ferrous scrap market sets off with mixed sentiments

The South Asian imported ferrous scrap market has witnessed varying sentiments across different regions. In India, distressed selling and cautious buying behaviour have led to slow bookings as participants were unwilling to pay higher prices. In Pakistan, impending increases in base rates and recent energy price hikes are putting strain on the industry, while Bangladesh's imported ferrous scrap market remains relatively silent with limited activity. Turkiye, on the other hand, grapples with concerns over low-priced deals and the potential impact of an energy price surge on rebar prices.

India:
The Indian imported scrap market witnessed distressed selling with offers being high and bookings limited. Buyers were showing interest in shredded at the $403-408/t level and HMS grade at the $375-380/t level. Most participants were not willing to pay high prices, and only a few hand-to-mouth bookings had occurred. Recent developments indicate small quantity bookings at $412/t from UK/Europe, with offers of the same ranging $410-415/t and those of PNS being heard at $420/t CFR Nhava Sheva.

In the domestic steel market, long product prices are anticipated to see a drop of INR 1000-1500/t, while flat product prices could see a slight rise or remain stable.

Pakistan:
Offers for shredded scrap were at $412-414/t CFR Qasim. State banks are expected to announce a 1% base rate increase, taking it to 23%, but the actual market rates could be even higher at around 25%. Recent electricity hikes and gas prices are impacting the industry, with 80% of businesses facing challenges, and the rest operating at only 50% capacity.

Bangladesh:
The imported ferrous scrap market in Bangladesh was relatively quiet in terms of containerised shredded deals, with offers being the same as the last closing price ($422/t CFR Chattogram). HMS (80:20) offers were heard at around $400-405/t CFR Chattogram. Bulk deals were in progress.

Turkiye:
There was a recent low-price deal of European origin at $339/t and $359/t (HMS and shredded) concluded. Turkish scrap importers are concerned about a potential energy price hike in August and its impact on rebar prices. Scrap recyclers are resisting the continuation of the downward price trend.

Recent deal:

• 500 t of European shredded scrap was booked at $412/t CFR Nhava Sheva
  
  
• 500 t of European HMS (80:20) scrap was booked at $380/t CNF Chennai
  
  

Price assessment

India: UK-origin shredded scrap offers inched up to $411/t CFR Nhava Sheva.
Pakistan: UK-origin shredded scrap offers moved up slightly to $413/t CFR Qasim.
Bangladesh: Offers for UK-origin shredded scrap were at $422/t CFR Chattogram, stable from last closing.
Turkiye: US-origin HMS 1&2 (80:20) prices were stable at $350/t CFR Turkiye.

Outlook
Overall demand in the South Asian scrap market may remain subdued, and participants would likely continue being hesitant about high-paying transactions. Buyers are likely to be cautious about procurement, leading to a balanced or sluggish market in the short term.