Weekly round-up: Global ferrous scrap offers dip as demand weakens across markets

The global ferrous scrap market witnessed a mixed week marked by bearish sentiment and downward price adjustments across key regions.

In Turkiye, scrap prices saw a gradual decline as weaker global fundamentals, particularly in China, and sluggish demand for Turkish rebar weighed heavily on the market. India's scrap market remained quiet post-holidays, with buyers adopting a cautious stance due to local market volatility. Pakistan and Bangladesh experienced slower demand as weak finished steel sales and domestic competition deterred imports, while Vietnam and South Korea faced modest declines in pricing due to bid-offer gaps and rising competition. Japan and the US also witnessed pricing challenges amid reduced export interest.

Turkiye: The Turkish imported scrap sector saw a gradual decline throughout the week, as bearish sentiment gripped the market due to weaker global fundamentals, particularly in China. US-origin scrap prices, initially firm at $380/t CFR, softened to $372/t CFR as mills aimed for lower prices, reflecting weak domestic demand for finished steel and disappointing export sales. The softening Chinese market and reduced demand for Turkish rebar also contributed to mills pushing for lower scrap prices to improve margins.

Despite high billet prices sustaining some interest in scrap shipments, sellers hesitated to meet mill bids as low as $360/t CFR. While European scrap inflows increased, short-sea markets showed signs of softening, although tight supply limited a sharper decline. With over 10 cargoes still needed for November shipments, market participants expected US suppliers to hold firm above $370/t CFR but they faced pressure due to lower prices.

A total of around six-seven bulk scrap cargoes were booked from the US and Europe. Major bookings from the US were at $377-378/t, whereas EU-origin scrap was sold at $367-373/t CFR Turkiye.

India: India's imported scrap market saw a quiet week, with buyers adopting a cautious stance amid weak global signals and local market volatility. Following the holiday period, demand remained subdued, with shredded scrap offers from the US and UK/Europe ranging from $400-410/t CFR Nhava Sheva. Buyers, however, were aiming for lower prices of $390-395/t.

HMS (80:20) offers stood at $375-380/t, but buyers were looking for even more competitive pricing. The widening bid-offer gap was evident as mills increasingly relied on domestic scrap due to favourable prices, further dampening the outlook for imports.

In all, around 5,000-6,000 t of mixed scrap were booked this week. This included approximately 3,500 t of shredded scrap from the US at $400-401/t CFR, with remaining HMS (80:20) and HMS1 secured at around $380-390/t CFR, indicating more cautious purchasing behaviour.

Pakistan: Imported ferrous scrap offers faced challenges this week due to weak demand for finished steel and competitive local prices. Offers for shredded scrap from the UK/Europe were around $405-410/t CFR Qasim, but buyers showed little interest as domestic scrap prices ranged from PKR 135,000 to 142,000/t ($486-511/t).

As the week progressed, a decline in steel demand became evident, worsened by a lack of construction activity. A steel mill official noted that the PKR 10,000-12,000 price difference between local and imported scrap deterred buyers, instilling hesitation among market participants.

Additionally, new tax regulations imposing an 18% sales tax on steel sales further complicated the market with ongoing liquidity issues and reluctance to invest in imports.

Bangladesh: This week, Bangladesh's imported ferrous scrap market remained weak, with offers declining by $5-6/t. Suppliers showed little interest due to delayed payments and challenges in securing new letters of credit (LCs), particularly for smaller buyers. Offers included US West Coast bulk scrap at $380-385/t and Australian HMS at $390-395/t, while weak finished steel demand and ongoing rains have stalled construction projects.

Buyers held off purchases due to sufficient inventory and flooding. Offers for shredded scrap were steady at $400-405/t CFR Chattogram, with local scrap prices ranging from BDT 50,500-51,500/t. Rebar offers in Chattogram were at BDT 85,500-87,000/t. The lack of new construction projects and adverse weather continued to dampen buying interest, leaving traders cautious amid broader macroeconomic headwinds.

Vietnam: The Imported scrap market dipped slightly this week, with Japanese H2 scrap offers falling to $340-$345/t CFR, down $5-10/t. Demand remained moderate, with mills considering alternative sources if prices exceeded $350/t. Deep-sea bulk scrap prices held steady, with US-origin HMS (80:20) at $375/t CFR and Australian HMS at $370/t CFR, but muted transaction activity continued due to a bid-offer gap.

Domestically, northern Vietnam's scrap offers for Type 1 remained stable at VND 9,000-9,400/t, while southern prices were at VND 8,500/t. Rising rebar and wire rod prices are fueling optimism for potential increases in scrap prices, suggesting a positive outlook for Vietnam's steel market.

South Korea: South Korea's imported scrap market remained stable this week, with seaborne bids for HS at JPY 51,000/t ($341/t) and shredded at JPY 49,000/t ($327/t) CFR. Domestically, H2-equivalent Light A grade prices held steady at KRW 390,000-410,000/t, while Heavy A grade remained between KRW 415,000-430,000/t.

Some steelmakers lowered prices due to sluggish rebar sales and increased competition from imports, while others maintained steady pricing. Overall sentiment was bearish, influenced by falling local rebar prices and rising competition from Chinese imports.

Japan: This week, Japanese H2 scrap export offers declined amid cautious sentiment and competitive pricing from other exporters, with offers at JPY 44,000/t ($293/t) FOB Tokyo Bay, down JPY 1,600/t ($11/t) from last week.

Tokyo Steel announced plans to open a new scrap iron collection centre in Funabashi, Chiba Prefecture, by mid-2025. The facility will handle 20,000 t of scrap in a month and support Tokyo Steel's target of producing 6 mnt of crude steel by 2030 and 10 mnt by 2050.

US: The US ferrous scrap export index fell this week due to limited interest from Turkiye and higher freight rates. HMS (80:20) bulk FOB East Coast dropped by $16/t at $343/t, with shredded bulk assessed at $363/t. The CFR price for US-origin HMS decreased to $372/t, while deep-sea cargo prices to Vietnam rose slightly to $368/t.

Turkish mills favoured EU scrap due to weak domestic demand, with recent bulk bookings at $377-378/t CFR. In India, two scrap cargoes were sold at $385-400/t CFR, while Bangladesh's demand remained sluggish due to weak finished steel demand and ample inventory.

China: Shagang Steel, China's largest steel producer, has decided to reduce ferrous scrap procurement prices by RMB 50/t ($7/t) for all grades, effective 18 October. Post-revision, HMS (6-10 mm) will be priced at RMB 2,510/t ($353/t), including 13% VAT. This marks the company's first price cut in October. The decline is attributed to lower raw material offers, falling finished steel prices, and weak market fundamentals.