Weekly round-up: Global ferrous scrap market weakens amid soft steel demand

• Turkiye prices drop on weak rebar demand, high inventories
  
  
• Competitively priced domestic scrap slows India market
  
  

This week, global ferrous scrap markets faced continued softness, driven by weak steel demand, high inventories, and cautious sentiment. Turkiye, India, and Pakistan saw price declines, while Bangladesh and Vietnam experienced limited activity. Issues like low rebar sales, financial challenges, and uncertainty over import duties weighed on the market, keeping trade minimal across key regions.

Turkiye: Turkiye's imported scrap market continued to decline throughout the week, with prices falling to $338/t, a 1% drop from $340/t w-o-w, marking a two-year low. Weak demand and high inventories put downward pressure on prices. While offers for US-origin bulk HMS (80:20) remained stable, buyers sought lower prices, while sellers hesitated to reduce offers, hoping for a potential recovery.

The sluggishness in steel demand, particularly in rebar, and ample supply dampened sentiment. Mills stayed cautious, and while some expected prices to hit a bottom, trade activity remained subdued with limited buying interest. Supply tightness in Europe failed to generate significant demand in Turkiye.

By weekend, the market had turned quiet, with no significant transactions. Buyers and sellers took a wait-and-see approach, while some traders hoped for a recovery after the holidays.

India: India's imported scrap market remained sluggish throughout the week, reflecting weak steel demand, liquidity challenges, and competitive domestic scrap prices.

Shredded offers from the US and UK/Europe dropped 1% to $378/t CFR from $383/t, while HMS stood at $357/t, down by 1% against $360/t w-o-w.

The availability of competitively priced domestic scrap further dampened import interest, while uncertainty over potential steel import duties and production cuts added to the cautious sentiment. Market participants adopted a wait-and-watch mode. Without measures like safeguard duties, the market is likely to remain stagnant, with limited transactions and minimal activity throughout the week.

Around 11,000-12,000 t of scrap were booked, including 7,000-8,000 t of HMS (80:20) at $350-372/t from South Africa, the UK/EU, Somalia, the Middle East, Brazil, and the US. Additionally, PNS was booked at $385-389/t from the UK, and tin can shredded scrap was booked at $357/t CFR from the UK/EU.

Pakistan: Pakistan's imported scrap market remained subdued throughout the week, with prices dropping 1% w-o-w to $380/t, down from $385/t. Weak demand and cautious sentiment prevailed, with offers for shredded scrap from the UK/Europe remaining high. However, buyers remained hesitant, targeting lower price levels, which limited trade activity.

Market activity remained slow as buyers awaited lower prices, while suppliers held firm. Weak construction demand and financial challenges kept trading minimal, with global scrap prices falling and both buyers and sellers staying cautious.

Despite this, around 1,000-2,000 t of scrap were booked, with shredded from the UK/Europe priced at $380-382/t, respectively.

Bangladesh: Bangladesh's imported scrap market remained sluggish this week, with prices at $380/t, a 2% drop from $387/t w-o-w, due to weak steel demand and financial challenges. Offers for EU/UK shredded scrap remained at $385-390/t CFR Chattogram, but buyers hesitated, anticipating further price drops. Offers for US HMS and Japanese H2 also saw limited interest amid weak construction activity and poor rebar sales.

Domestic demand in Bangladesh weakened further due to liquidity concerns and slow rebar sales. Local scrap prices remained steady at BDT 49,000-51,000/t, with limited trading. Buyers stayed cautious, hoping for improvement by year-end amid ongoing uncertainty.

South Korea: South Korea's imported scrap market remained weak, with Japanese HS and shredded scrap offers at JPY 50,000/t ($334/t) and JPY 48,000/t ($320/t), respectively. Domestic scrap prices stayed stable but are expected to decline as mills reduce production, citing weak rebar sales and sluggish construction. The overall market sentiment remains negative with low operating ratios.

Japan: Japanese H2 scrap export offers fell by $3/t this week due to weak demand, high freight costs, and bearish market sentiment. Sluggish interest from Vietnam, driven by low domestic construction activity and financial constraints, added to the pressure.

Additionally, the stronger JPY negatively impacted Japan's FAS prices, while buyers shifted focus to more competitive alternatives and deep-sea risks.

Vietnam: Vietnam's imported scrap market remained sluggish this week, with weak demand, cautious sentiment, and financial challenges limiting trade. Japanese H2 was offered at $335/t CFR, with bids at $325/t, while US HMS 80:20 at $360/t CFR saw limited interest due to high costs and risks. Uncertainty over prices kept mills from making new bookings.

Domestically, prices dropped to VND 8,100/t ($318/t) in southern Vietnam due to weak construction activity and financial challenges. Mills minimised restocking, adopting a wait-and-watch approach amid low demand and limited infrastructure spending.

Taiwan: Imported scrap prices continued to decline in Taiwan, with US HMS (80:20) offers at $300-305/t CFR and Japanese H1/H2 at $315-320/t CFR, driven by weak buying interest.

Domestically, Feng Hsin Steel reduced rebar and scrap prices by TWD 200/t ($6/t) as global scrap prices fell and sluggish demand persisted, highlighting ongoing challenges in the steel sector.

UAE: The UAE scrap market saw muted activity this week due to extended holidays, with HMS (80:20) processed prices at AED 1,238-1,240/t ($337-338/t) DAP Abu Dhabi and shredded scrap at AED 1,270-1,280/t ($346-348/t). Limited trades and reduced spreads with imported HMS ($18-20/t) reflect cautious sentiment, though AGSI and Dana Steel expansions suggest optimism in the near term driven by growing construction activities and increasing rebar prices.

US: The US ferrous scrap export index fell by $3/t w-o-w due to weak demand from major buyers like Turkiye and Bangladesh. This decline was driven by falling rebar prices, reduced exports, and low public sector demand. US sellers withdrew, anticipating a market recovery after the holidays, with potential supply tightening.