Weekly round-up: Global ferrous scrap market sees mixed trends; South Asian buyers show limited interest

The global ferrous scrap market saw mixed trends this week: South Asian markets like India, Pakistan, and Bangladesh remained stable with limited demand due to bid-offer disparities, need-based buying, and dull steel markets amid monsoon, though Bangladesh showed interest in US bulk scrap cargoes. The Turkish market saw a few deals but remained stable as mills waited for softer offers, with sellers firm due to high collection costs. Japanese H2 scrap export offers rose by $4/t following the Kanto tender hike, although prices dropped in dollar terms due to the JPY's depreciation.

Turkiye: This week, Turkish imported ferrous scrap prices remained stable, with firm offers at $394-395/t for US-origin scrap, though local mills pushed bids down to $385/t due to sluggish rebar market. Despite bearish buyer sentiment, workable prices for US and Baltic-origin HMS (80:20) remained between $386-388/t CFR. Around 8 deep-sea bulk vessels were booked this week, majorly from European region.

Short-sea scrap deals were heard from Romania at $368-370/t CFR and Croatia at $378-380/t CFR.

Turkish steelmakers are restocking for July and August despite weak domestic finished steel markets. Recent deals included European and North European suppliers selling HMS (80:20) at $384-388/t CFR Turkiye.

BigMint's assessment for US-origin HMS (80:20) bulk scrap was at $390/t CFR Turkiye and $362/t FOB East Coast, down $2/t w-o-w.

The scrap-to-rebar spread held steady w-o-w at $188-190/t FOB. Domestic rebar prices are under pressure due to weak demand, though some mills increased auto bundle scrap prices.

India: Throughout the week, India's imported scrap market was characterised by weak demand and persistent bid-offer disparities. Subdued finished steel sales, cost-effective domestic alternatives, and a cash flow crunch due to delayed credit payments contributed to low market activity. Steel mills, holding ample steel inventories, faced sluggish demand impacted by a lack of new project announcements and the rainy season. Indicative offers for shredded scrap from the US and UK/Europe remained at $410-415/t CFR, while buyers aimed for $400-405/t CFR. HMS (80:20) offers from West Africa and UK/Europe were assessed at $385-390/t CFR.

Pakistan: The Pakistani imported ferrous scrap market remained sluggish during the week due to slow rebar sales and unclear market conditions. Steel mills limited scrap procurement to immediate needs, with shredded scrap offers from the UK/Europe assessed at $425-430/t CFR Qasim and US offers around $418-419/t CFR. UAE offers for shredded and HMS-PNS mix ranged between $430-435/t CFR. Domestic scrap prices were PKR 155,000-158,000/t exw, while billet and rebar were priced at PKR 218,000-220,000/t and PKR 260,000-263,000/t, respectively.

Bangladesh: Imported ferrous scrap offers into Bangladesh were largely stable w-o-w for containerised prices, while bulk offers faced slight pressure amid increased inquiries from Australia and the US. Letters of credit (LC) delays have slowed fresh inquiries, but buyers plan to procure before the next production cycle in late August-September, primarily from the UAE, the US, and Australia. High container freights from Hong Kong, Singapore, and Malaysia pressurised buyers.

BigMint assessed Europe-origin containerised shredded was stable at $424/t, with HMS (80:20) at $406/t, up by $4/t w-o-w.

Containerised Australian offers were $410/t for HMS (80:20) and $430/t for shredded; SE Asian PNS offers were $440-445/t. US-origin shredded was at $430/t CFR Chattogram.

US-origin HMS (80:20) bulk dropped to $402/t CFR Chattogram. Increased activity before the monsoon and favourable prices are driving interest in US bulk scrap, with several deals expected this month.

In bulk offers, Japan-origin H2 was at $400/t and US HMS (80:20) at $405/t.

Domestic rebar prices were at BDT 86,000-87,000/t exw Dhaka and BDT 92,000-93,000/t exw Chattogram, with billets at BDT 74,500-75,500/t.

Japan: Japan's H2 scrap export offers have increased by JPY 700/tonne (t) ($4/t) over the past week following the conclusion of the recent Kanto tender and active participation from Vietnam.

According to BigMint's latest assessment, Japanese H2 scrap export offers are now at JPY 52,100/t ($327/t) FOB Tokyo Bay, up from JPY 51,400/t ($323/t) FOB in the previous week.

In the latest Kanto tender, a major Vietnamese steel company secured around 14,000 t of H2 scraps at JPY 52,168/t ($328/t), representing an increase of approximately JPY 804/t ($5/t) compared to JPY 51,364/t ($323/t) in June's Kanto tender. However, in dollar terms, there was a decrease of about $4/t due to the JPY's depreciation against the US dollar.

On the other hand, Tokyo Steel, the largest EAF steel producer in Japan, has announced a JPY 500/t ($3/t) drop in its scrap procurement prices across all its plants, effective from 13 July. The current price for H2 scrap stands at JPY 51,500/t ($323/t) at its Tahara plant and JPY 52,000/t ($327/t) at its Utsunomiya plant.

South Korea: Major South Korean steel mills were not interested in booking scraps from the seaborne market due to subdued steel demand due to the off-season. Notably, POSCO was the only steel major that made bids for Japanese scraps at around JPY 59,500/t for shredded and JPY 60,000/t for HS.

This week, the combined ferrous scrap inventory of eight major South Korean steel mills reached 807,000 t, a 2% or 18,000 t decrease from the previous week's 825,000 t.

Vietnam: Vietnamese steel mills exhibited limited interest during the week due to a slowdown in the domestic flat and longs market. However, demand from Vietnam remained relatively stronger compared to other Japanese scrap-importing nations, with the recent Kanto tender awarded to a Vietnamese steel mill. Market participants have noted that steel demand has slightly improved compared to the early months of the year.

H2 scrap offers from Japan were heard at $365-370/t CFR Vietnam, while buyers' asking prices were around $360-362/t CFR.

China: Shagang Steel has declared an additional increase of around RMB 50/t ($7/t) in ferrous scrap procurement prices with effect from 8 July 2024. The new price of HMS (6-10 mm) was assessed at RMB 2,840/t ($391), including 13% VAT. Remarkably, this was the second increase in this month.