Weekly round-up: Global ferrous scrap market remains subdued

• Weak demand prevails n Turkiye, India, Pakistan
  
  
• Japanese H2 scrap prices rise amid increased export interest
  
  

This week, the global ferrous scrap market witnessed a downward movement. In Turkiye, prices fell as mills held off on new orders due to weak domestic rebar sales. In India, cautious buyers struggled with a bid-offer mismatch ahead of the Diwali festival, while Pakistan dealt with cash flow issues and abundant domestic scrap, limiting new bookings.

Bangladesh saw inactivity from stalled construction projects, and Vietnam struggled with low government investment, dampening purchasing interest. Overall, the market reflected a climate of uncertainty as participants navigated high inventories and fluctuating prices.

Turkiye: This week, Turkiye's imported scrap market showed notable instability, with prices for US HMS (80:20) initially holding at $372/t CFR before dropping to $365/t. This decline was driven by sluggish domestic rebar sales, prompting mills to seek lower costs and contributing to a bearish market sentiment.

Mills remained hesitant to place new orders, preferring to wait for potentially better prices. This cautious approach resulted in a stalemate, as both buyers and sellers held firm, with limited confirmed trades in the market.

Speculation about EU material becoming available at around $360/t CFR added to the uncertainty. As Turkish mills aimed to secure better deals by delaying purchases, participants faced an increasingly unclear outlook for upcoming developments in the scrap market.

A total of around 2-3 bulk mix scrap cargoes were booked from the US and Europe. Major bookings from the EU were HMS (80:20) at $358/t and Bonus at $378/t, whereas US-origin HMS (80:20), Bonus, Shredded mix scrap was sold at $364, 384, 384/t CFR Turkiye.

India: India's demand for imported scrap remained subdued due to a bid-offer mismatch and a slowdown in the domestic steel market, exacerbated by cyclone disruptions and the approaching Diwali festival. Offers for shredded scrap from the US and UK/Europe were around $395-400/t CFR Nhava Sheva, while HMS (80:20) was assessed at $370-385/t, with buyers seeking lower prices.

Market participants noted that the festive season and competition from Turkish buyers for European scrap created a cautious sentiment. As bid-offer gaps widened and expectations misaligned, the market was anticipated to stay soft in the coming weeks.

Overall, approximately 9,000-10,000 t of scrap were booked this week, including about 2,500 t of shredded scrap from the US and UK/EU at $392-395/t CFR, with the remainder consisting of HMS (80:20), blue steel, cast iron scrap, and fabrication.

Pakistan: This week, Pakistan's demand for imported scrap remained weak due to sluggish steel sales, delayed payments, and the affordability of domestic scrap. As fresh shipments arrived, offers dropped to $395-398/t CFR, while buyer bids lingered around $390-392/t.

Limited interest in new bookings emerged as previously ordered material saturated the market, leaving the outlook uncertain amid high inventories and subdued demand for finished steel products.

Bangladesh: This week, Bangladesh's imported scrap market remained sluggish due to a slowdown in the domestic steel sector, with reduced construction activity and halted projects. Offers for shredded scrap were around $405-410/t CFR Chattogram, while HMS (80:20) was at $390-395/t, but buyers were seeking lower prices.

Ongoing letters of credit (LC) issues and high inventories restrained demand, leading to inactivity among major players. As the week ended, poor demand for finished products, particularly steel bars and billets, dampened activity further, leaving the market outlook uncertain amid cautious sentiment.

Vietnam: Vietnam's imported scrap market remained subdued during the week, with weak domestic demand and low government investment disbursement hindering buying interest. Offers for Japanese H2 scrap ranged from $345-355/t CFR, but bids stayed lower at $330-340/t CFR, showing limited appetite for high-priced material. Mills largely monitored from the sidelines, expecting potential declines in spot H2 prices. In the deep-sea segment, US and Australian-origin HMS (80:20) offers were steady at $375/t and $370/t CFR Vietnam, respectively, but persistent bid-offer gaps led to limited activity as buyers found prices unappealing and held off on bulk purchases.

South Korea: South Korea's imported scrap market remained sluggish through the week, as domestic prices for H2-equivalent light A-grade scrap fell to around KRW 380,000/t ($275/t), down from KRW 390,000-410,000/t. Heavy A-grade scrap also slipped, pressured by slow demand for downstream steel products and the upcoming winter season, which traditionally weakens construction activity.

Domestic scrap prices stayed competitive due to currency exchange rates, with import demand restrained by low steelmaker profitability. Mill bids for imported HS, shredded, and Shindachi Bara scrap grades held at levels between JPY 49,000-51,000/t ($322-335/t) CFR Korea as mills avoided high-cost imports, contributing to limited transaction activity.

Japan: Japanese H2 scrap export offers increased this week, rising by JPY 2,200/t ($14/t) to JPY 46,200/t ($303/t) FOB Tokyo Bay. This uptick was driven by recent deals in Taiwan, where mills favored Japanese scrap over US bulk cargoes, alongside rising domestic H2 collection prices in Japan. Limited deep-sea interest from Vietnam and South Korea further supported these higher prices.

In the domestic market, average H2 scrap prices rose for the second consecutive week, climbing by JPY 300/t ($2/t) to JPY 38,000/t ($250/t) as of October 23. Kanto prices increased slightly by JPY 100/t ($1/t) to JPY 41,300/t ($272/t), while Kansai saw a more significant jump of JPY 800/t ($5/t) to JPY 36,400/t ($240/t). Chubu's prices remained stable at JPY 36,200/t ($238/t).

US: This week, the US ferrous scrap export index declined, primarily due to weakened demand from Turkiye, which was seeking lower import prices amid cheaper European options. As Turkish imported bulk scrap prices fell sharply, US exporters faced pressure to reduce their offers.

The slowdown in domestic rebar sales in Turkiye has further dampened inquiries from steel mills, leading to unusual pricing in recent bulk bookings. While there is some optimism in the US market, suppliers remain hesitant to lower prices due to ongoing uncertainties and slow rebar sales complicating scrap purchases for Turkish mills.