Weekly round-up: Global ferrous scrap offers head south amid soft demand in key markets

• Imported scrap prices into Turkiye drop on weak steel demand
  
  
• India's scrap market weakens as steel demand worries linger
  
  

Global ferrous scrap markets witnessed a downtrend in prices, driven by weak demand and cautious trading in key regions. In Turkiye, India, Pakistan, and Bangladesh, mills focused on managing inventories, limiting restocking activity. Vietnam and Japan saw sluggish markets ahead of holidays, while South Korea reported a significant drop in scrap inventory, reflecting subdued market conditions.

Turkiye: Turkiye's imported scrap market saw a consistent decline throughout the week, driven by weak demand for finished steel and subdued sales. Mills secured lower-priced US-origin cargoes, with trade values ranging between $327-342/t CFR, as oversupply and cautious buying dominated the market.

European recyclers faced difficulties in adjusting collection costs amid harsh winter conditions, limiting their ability to offer competitive prices. Mills, capitalising on the Euro's depreciation and ample January shipment cargoes, pushed for lower prices, with bids targeting $325-327/t CFR. Despite the bearish market sentiment, some sellers remained hopeful of a February recovery, citing stronger US domestic fundamentals that could tighten export supply.

Uncertainty persisted as buyers and sellers remained divided on future price expectations. Seasonal factors, weak rebar demand, and low construction activity weighed on sentiment, while mills continued low-level restocking. With limited liquidity and subdued end-product sales, the market outlook remains bearish in the near term.

India: India's imported scrap market remained subdued throughout the week, weighed down by sluggish demand amid a downturn in the domestic steel sector. Bid-offer mismatches were a key hurdle, with suppliers quoting shredded scrap from the US and UK/Europe at $370-375/t CFR Nhava Sheva, while buyers capped bids at $365-370/t CFR. Similarly, HMS (80:20) offers from Europe and West Africa at $350-360/t CFR failed to attract significant buyer interest, leading to limited transactions.

The depreciating Indian rupee, nearing a record low against the USD, further escalated import costs, discouraging buyers. Domestic buyers increasingly turned to locally sourced sponge iron as a cost-effective alternative, adding to the challenges in the imported scrap market. With weak steel demand and unfavourable economic conditions, India saw minimal participation in the imported scrap market, effectively staying out of action for the week.

Additionally, India's government has introduced an 8% threshold for automakers under the Extended Producer Responsibility (EPR) to ensure recycled content in products, which promises to boost scrap generation and vehicle recycling. With 138 Registered Vehicle Scrapping Facilities (RVSFs) and the upcoming 2025 EPR rules, India aims to foster a self-sustaining scrap steel economy and promote sustainability.

Approximately 1,000-2,000 t of scrap were booked, including 700-800 t of HMS (80:20) from the UK and US at $350-355/t. Additionally, 250-500 t of HMS and CI mix scrap were booked from West Africa at $250/t.

Pakistan: Pakistan's imported scrap market remained subdued throughout the week, with mills operating at reduced capacities of 40-45% due to weak steel demand. Limited liquidity, weak downstream activity, and seasonal factors further dampened trading volumes. Domestic scrap prices dropped to PKR 140,000-142,000/t, while rebar prices held steady at PKR 240,000-245,000/t, reflecting cautious market sentiment.

Shredded scrap offers from the UK/Europe ranged between $380-385/t CFR Qasim, but buyers remained hesitant, bidding at $380-383/t. Suppliers faced growing pressure to lower offers as market conditions softened, with collection rates from Europe at $330-332/t FOB, translating to $380-382/t CFR after adding freight.

Bangladesh: Bangladesh's imported scrap market remained sluggish throughout the week due to weak domestic demand and slow progress of government projects. Rebar prices fell by BDT 500-1,000/t, further dampening buyer activity. Mills, holding sufficient inventories, showed little interest in fresh bookings.

Import offers for HMS 80:20 and shredded scrap ranged between $360-385/t CFR Chattogram, but the market lacked clear momentum, with bid-offer gaps persisting. Buyers were hesitant to commit as key mills focused on managing existing inventories.

Traders reported ongoing bulk inquiries, but there were no significant bids. With minimal transactions and limited buying interest, the outlook remained cautious due to weak domestic steel demand and slow government project activity.

Japan: H2 offers declined slightly to $267/t FOB Tokyo Bay due to weak demand, especially from Vietnam, and limited bidding interest. Despite expectations of price hikes post Kanto tender, buyers were cautious and spot liquidity stayed thin. The average H2 price in Japan remained unchanged at $243/t.

South Korea: This week, no firm offers or bids were reported from South Korea. Meanwhile, the combined ferrous scrap inventory of eight major South Korean steel mills fell nearly 10% w-o-w to 713,000 t. The central region experienced a sharper decline of 11% w-o-w, whereas the southern region saw a more moderate drop of around 7.4%.

Vietnam: Vietnam's imported scrap market remained sluggish, with Japanese H2 offers at $312-325/t CFR and bids around $295/t CFR. Demand weakened ahead of the Tet holidays, with mills holding sufficient inventory and limited restocking. Offers for bulk HMS (80:20) increased slightly, but bid-offer mismatches and cautious trading kept market activity subdued.