Weekly round-up: Global ferrous scrap offers drop up to 3% w-o-w

Global ferrous scrap offers declined 1-3% across markets. South Asian countries like India and Pakistan displayed minimal interest in booking scrap from the seaborne market. However, Bangladesh showed more interest and aimed to source more bulk vessels, particularly from the USA and Australia, owing to competitive pricing.

In Japan, the recent Kanto tender experienced a sharp drop of JPY 2,987/t ($20/t) due to limited buying from major importing countries such as South Korea, Vietnam, and Taiwan. South Korean mills remained absent from the seaborne market due to inventory buildup at local mills and a drop in domestic scrap prices.

Turkiye: Turkish imported ferrous scrap market witnessed fluctuating offers throughout the week. Initially, there was a slight uptick in offers following some concluded deals of HMS (80:20) towards the end of the previous week, hovering around $378-380/t CFR levels. However, these prices rebounded due to the subdued conditions in the Chinese market.

On a weekly average basis, US origin HMS (80:20) scrap offers stood at $378/t, down by $2/t compared to $380/t CFR in the previous week.

India: In India, the demand for imported scrap remained lackluster as buyers continued to primarily procure from the domestic market due to its cost-effectiveness. Shredded scrap offers dropped by $3/t to $403/t CFR on a weekly average basis, while HMS (80:20) stood at $377/t CFR, down by $5/t compared to $382/t CFR.

A representative from a steel mill commented, "We are currently not interested in purchasing imports. Turkiye has halted its purchases if prices drop by more than $10/t. Indian buyers are expected to resume bookings, but with elections approaching, market activities are anticipated to remain sluggish."

Pakistan: Activity in the Pakistan scrap market remained moderate with fresh inquiries. A cautious market observed global price trends as steelmakers aimed to reduce their average procurement costs following a recent decline in finished steel prices.

A prominent mill source stated, "Some buyers are waiting for prices to hit bottom as Turkiye is also experiencing sharp declines. Our finished steel market is also slowing down, giving scrap buyers little incentive to acquire materials at higher prices."

On a weekly average basis, shredded scrap offers from the UK and Europe were at $408/t CFR, down by $6/t from $414/t CFR in the previous week.

Bangladesh: In Bangladesh, the imported ferrous scrap market saw heightened activity despite ongoing price declines. Bangladeshi scrap importers secured bulk deals from the US and Australia, with US recyclers selling HMS scrap at $395/t and $400/t CFR Chattogram. Additionally, a Bangladeshi mill purchased bulk HMS (80:20) from Australia at around $395/t CFR.

Domestic rebar prices ranged from BDT 89,000-90,000/t ($811-820/t) exw Dhaka and BDT 96,500-97,500/t ($879-889/t) ex Chattogram. Billets were priced at BDT 78,000-78,500/t ($711-715) exw, while ship-breaking scrap prices stood at BDT 63,300-63,600/t ($577-580/t).

Improved domestic rebar sales were noted post-election, with increased infrastructure development boosting construction activity and demand for long products.

Japan: Around 5,000 t of H2 scrap were secured in the recent Japanese Kanto export tender, at JPY 50,100/t ($340/t) on a FAS basis, marking a significant decline of JPY 2,987/t ($20/t) compared to the previous month. The FOB price is estimated to be around JPY 52,000-52,500/t ($352-356/t), equivalent to INR 29,445/t (FOB). The shipment is expected to be booked for Vietnam.

Additionally, Tokyo Steel, a leading Japanese mill, announced a price reduction of JPY 1,000/t ($7/t) for domestic ferrous scrap, effective from 13 March, 2024. This adjustment, marking the second price drop in March, brings the new price for H2 scrap at the Tahara, Okayama, and Utsunomiya plants to approximately JPY 51,500/t ($349/t).

South Korea: During the second week of March, the iron scrap inventory of South Korea's eight largest steelmakers reached an estimated 826,000 t, showing a slight increase of about 15,000 t compared to the previous week's 811,000 t. Additionally, as news of a price reduction circulated in early to mid-March, there was a noticeable uptick in the amount of iron scrap received, coinciding with a slight rise in inventory levels.

China: Shagang Steel, a leading steel mill in China, has lowered purchase prices for ferrous scrap across all grades by RMB 70/t ($10/t) effective from 12 March 2024. The revised price for HMS (6-10 mm) now stands at RMB 2,850/t ($396/t), including 13% VAT. This marks the third consecutive price reduction this month, influenced by the recent decline in Japanese Kanto scrap export tender prices.