Weekly round-up: Global ferrous scrap markets under pressure amid week steel demand

• Turkish, Indian scrap prices show signs of gradual softening
  
  
• High inventories, logistical issues keep prices subdued in Asia
  
  

This week, global scrap markets saw mixed trends. Turkiye and India faced weak demand and prices softening, while Pakistan and Bangladesh showed subdued activity due to high inventories and cautious buying. The South Korean and Taiwanese markets remained stagnant due to reduced steel production. In contrast, the UAE saw price increases for processed HMS, driven by stronger export demand.

Turkiye: This week, Turkiye's imported scrap market softened, with US-origin HMS (80:20) prices dropping by $6/t w-o-w to $356/t CFR, driven by weak steel demand, particularly for rebar. Long steel prices remained stagnant, keeping market sentiment cautious and mills hesitant to bid higher.

The weakening Euro further pressured EU-origin scrap, with tradable levels for imported scrap staying around $360-365/t CFR. Some deals were reported for European-origin HMS at $356/t CFR.

Despite a stronger US dollar and favourable exchange rates for Turkish buyers, limited trading activity and soft demand kept the market cautious. Traders expect price consolidation or declines in the near term, with mills awaiting clearer signals on steel demand.

India: India's imported scrap market remained subdued this week due to weak domestic steel demand and high inventory levels. Shredded scrap offers from the US and UK/Europe held steady at $390-400/t CFR, but buyers focused on lower-priced options. HMS (80:20) was quoted at $365-380/t CFR, with limited trading activity and minimal bulk bookings.

Domestic price declines, production cuts by mills, and external pressure from falling Turkish prices dampened market sentiment. Buyers prioritized domestic scrap over imports, remaining cautious amid ongoing uncertainty and weak steel sales.

Approximately 13,000-14,000 t of scrap were booked during the week, including shredded, HMS (80:20), LMS, PNS, and HMS and PNS mix, sourced from West Africa, the US, Peru, Bahrain, UK/EU, Latin America, and Yemen, with shredded scrap accounting for 3,000-4,000 t.

Additionally, an unverified bulk deal from Japan for 10,000 t-CR busheling scrap was heard destined for Chennai, expected to arrive in December.

Pakistan: This week, Pakistan's imported scrap market saw a modest decline, with shredded scrap prices dropping by $4/t to $392/t CFR Qasim. The market remained subdued due to weak domestic demand, high inventory levels, and a bid-offer gap.

Buyers hesitated to meet higher offers, targeting $390-395/t, while sellers held at $395-400/t, leading to a bid-offer disparity and limited trading. Smog in Punjab also disrupted logistics, further stalling market activity.

Local rebar demand remained stagnant, with mills cautious due to high inventories and a lack of new government projects. Rebar prices held steady at PKR 250,000/t, dampening buying interest in scrap unless prices were adjusted lower.

Bangladesh: This week, Bangladesh's imported scrap market saw a slight dip, with shredded scrap prices falling $5/t w-o-w to $396/t CFR Chattogram, while bulk HMS (80:20) from the US remained stable at $380/t.

Premium scrap grades, such as PNS from Hong Kong and Malaysian busheling, remained above $425/t, but there was little buyer interest. Offers for shredded scrap from Australia were stable at $402-405/t, while HMS was priced at $390/t, but buyers continued to focus on securing lower bids.

Market activity remained subdued, driven by weak demand, high inventories, and financial constraints, including LC restrictions and rising freight costs. Mills stayed cautious, waiting for LC issues to ease and hoping for price reductions in the near term.

South Korea: South Korea's imported scrap market remained stagnant this week due to reduced production and purchase restrictions by steelmakers. POSCO recently bid for Japanese shredded scrap at JPY 49,000/t ($315/t), JPY 50,000/t ($322/t) for Shindachi Bara, and JPY 51,000/t ($328/t) for HS on a CFR basis.

Low steel production and limited purchasing allocations have led to supply challenges, with intense competition among suppliers squeezing profit margins. The reduction in November production schedules has weakened price momentum, and the market is expected to remain cautious, prolonging the supply-demand imbalance.

Japan: Japanese H2 scrap export offers increased w-o-w, especially to Vietnam, driven by stronger bids and limited availability from other exporting nations. Further supporting the rise was the recent Kanto tender, which saw a Vietnamese mill booking approximately 15,000 tonnes (t) of scrap at JPY 45,180/t ($293/t) FAS. While this indicates decent buying interest in the country, overall demand is subdued and cautious sentiments prevail.

Vietnam: Imported scrap market remained subdued this week, with limited liquidity and cautious procurement. Japanese H2 scrap offers were around $335-340/t CFR, while bids were lower at $330/t CFR. Suppliers paused negotiations due to rising freight costs and vessel shortages.

Domestic demand was weak, with mills reluctant to purchase amid low government investment and project delays. Despite the usual active procurement period, mills are delaying purchases, waiting for clearer price direction. Deep-sea alternatives saw limited interest due to high costs and a cautious risk appetite among buyers.

Taiwan: Taiwan's imported scrap market softened this week, with weak demand in the steel sector. US-origin HMS (80:20) offers held at $320/t CFR, but bids fell to $314-315/t CFR. Japanese bulk H1/H2 offers at $335/t CFR were uncompetitive due to high freights. Local mills, including Feng Hsin Steel, lowered rebar and scrap prices amid weak demand and global market pressure, with further impact from the struggling Chinese steel market.

UAE: The UAE's imported scrap market saw a price increase for processed HMS (80:20), rising by AED 26/t ($7/t) w-o-w due to stronger demand from export markets like India and Pakistan. Shredded scrap demand dropped, and local supply remained balanced. Rebar demand supported market stability, with exports continuing to drive activity.