Weekly round-up: Global ferrous scrap offers drop by up to 7% w-o-w, buyers remain cautious

This week witnessed a decline in global ferrous scrap prices, ranging from 2-7% across various markets. Indian buyers exercised caution and adopted a wait-and-see approach due to the availability of cost-effective alternatives in the domestic market, along with the arrival of cargoes at lower prices. In contrast, Pakistani buyers viewed the price drop as an opportunity and replenished their stocks ahead of the commencement of Ramadan. Bangladeshi buyers exhibited moderate activity.

Japanese H2 scrap export offers experienced a significant decrease this week, attributed to reduced buying interest from key importers such as South Korea, Taiwan, and Vietnam. Additionally, buyers exercised caution and awaited the results of the Kanto tender scheduled for 12 March.

Turkiye: Imported ferrous scrap prices in Turkiye dropped significantly due to downward trends in supplier markets. US-origin HMS (80:20) bulk scrap fell to $374/t CFR, down $27/t from last week. Offers from the US to Turkiye declined rapidly to $375/t levels. In the EU, HMS collection costs in the Benelux region dropped to Euro 300-302/t.

Around 7-8 vessels were sold from the EU and US regions at $376-390/t. EU-origin scrap prices hover around $380/t CFR, raising concerns about reaching the bottom. Steel mills have begun booking for April shipments, expecting a stronger month after a weak buying phase in February, although March's initial days might face disruptions due to Ramadan.

India: In India, market activities slowed down over the week due to discrepancies in prices between domestic and imported scrap, compounded by expectations of further drops in offers due to the ongoing decline in Turkish prices. Additionally, buyers exhibited heightened interest in materials arriving in March and April at lower offers, particularly from non-European origins. Shredded scrap offers from UK/Europe saw a weekly average decrease of $9/t to $406/t CFR compared to last week's $415/t CFR, while HMS (80:20) offers also decreased by $9/t w-o-w to $382/t CFR.

A representative from a trading company remarked, "The market is currently experiencing a quiet period. We anticipate an improvement in buying activity towards the end of March. With nearly a $20 gap between domestic and imported scrap prices, offering at this juncture seems futile."

Pakistan: Imported ferrous scrap demand in Pakistan improved slightly this week due to restocking by steel mills as offers were declining so buyer took this as an opportunity and booked some material. Weekly average offers for shredded scrap offers from Europe dropped significantly by $15/t to $414/t CFR from $430/t in the previous week. Moreover, towards the weekend, offers reached around $405/t CFR levels.

Around 3,000 t of shredded scraps were booked from Europe throughout the week at $405-420/t CFR.

Bangladesh: In Bangladesh, the imported ferrous scrap market saw prices decline with moderate activity. Containerised shredded scrap from the UK and Europe fell by $12-15/t, while HMS (80:20) offers dropped to $405-408/t CFR Chattogram. Several deals totalling 8,500-10,000 t were closed, including grades from Australia, the UK, Hong Kong, and Malaysia. US-origin HMS (80:20) bulk scrap dropped by $15-18/t to $412/t on a CFR Chattogram basis. Japanese H2 scrap offers ranged from $410-415/t.

Recent deals include Malaysia-origin busheling scrap at $440/t, Brazil-origin PNS scrap at $430/t, and UK shredded scrap at $420/t CFR Chattogram.

In the domestic sector, rebar prices ranged from BDT 89,500-90,500/t exw Dhaka and BDT 96,000-97,000/t ex Chattogram. Billets were priced at BDT 77,000-78,000/t exw. Local ship-breaking yard scrap prices were at BDT 63,250-64,500/t.

Japan: Japan's H2 scrap export offers dropped during the week owing to diminished interest from major importing countries. According to BigMint's weekly assessment, Japanese H2 scrap export offers now stand at JPY 50,400/t ($342/t) FOB Tokyo Bay, indicating a decrease of JPY 1,700/t ($12/t) compared to last week's JPY 52,100/t ($354/t) FOB.

Tokyo Steel, a prominent Japanese mill, has decided to reduce its prices for domestic ferrous scrap by JPY 500/t ($3/t), effective 8 March. Consequently, the new price for H2 scrap at the Tahara, Okayama, and Utsunomiya plants is approximately JPY 52,500/t ($355/t). This adjustment holds significant importance as it signifies the first price decrease in March preceding the upcoming Kanto tender.

South Korea: South Korea continued to stay on the sidelines for the entire week, marking a full month since a South Korean mill had placed bids in the seaborne market.

The iron scrap inventory of the eight leading South Korean steel mills in the first week of March stood at 811,000 t. This marks a 2.5% decrease from the previous week's inventory of 832,000 t as reported earlier.

Vietnam: Vietnamese buyers refrained from booking scraps from the seaborne market due to disparities in bids and offers. Japanese H2 scrap export offers stood at $385/t CFR Vietnam, while buyers' bids were around $380/t CFR levels.

China: Shagang Steel, a prominent steel mill in China, has reportedly decreased procurement prices for ferrous scrap across all grades by RMB 50/t ($7/t), effective from 6 March 2024. The revised price stands at RMB 2,950/t ($410/t) for HMS (6-10 mm), inclusive of 13% VAT. Notably, the company also decided to keep its long steel prices unchanged for early March 2024.