Weekly round-up: Global ferrous scrap offers witnesses downward trend w-o-w amid thin trades

This week, global prices for ferrous scrap witnessed a decline, driven by decreased demand across various markets. In India, discrepancies in bidding and offering prices, along with cost-effective alternatives in the domestic market and ample buyer stocks, have resulted in a cautious approach from buyers. Many are opting to hold off fresh scrap bookings from overseas sources, amid significant distress sales. Additionally, markets in Pakistan and Bangladesh are facing challenges with Letter of Credit (LC) issues post-elections, alongside a sluggish finished steel sector.

Japan's export offers remained steady compared to the previous week, as major importing nations showed limited activity following the Lunar New Year holidays.

Turkiye: Turkish imported ferrous scrap prices dropped due to sluggish rebar sales, allowing mills to push for lower prices. BigMint assessed US-origin HMS (80:20) at $411/t CFR, down $6/t. EU/UK-origin HMS (80:20) was at $405-$407/t CFR, while Baltic-origin ranged below $408-412/t CFR.

Despite buyers' caution amidst subdued steel market conditions, their price expectations clashed with suppliers' offers, limiting transactions. Turkish mills aimed for lower prices, bidding $400/t CFR for US-origin HMS (80:20).

The rebar export prices slightly decreased to $608/t FOB, with buyers eyeing scrap price drops to $400-$405/t CFR. Market sources foresee limited downside potential in scrap prices, noting potential restocking needs for March and elevated collection costs. The scrap-to-rebar spread was evaluated at $195-199/t, considering that Turkish exported rebar was assessed at $606-610/t FOB Iskenderun.

Euro appreciation against the dollar hindered sellers' ability to lower prices, with US material at $412-415/t CFR amid buy-side pressure.

India: In India, purchasers remained wary of booking scrap materials sourced from Europe due to a price difference of at least $20/t. However, a few transactions were noted during the week from alternative regions like Latin America, Central America, and Yemen.

Aside from the pricing gap, demand downstream in India stayed subdued as buyers held significant inventories, while distress cargo sales continued in the market, as per industry sources.

On a weekly average basis, shredded scrap offers remained at $416/t CFR Nhava Sheva, unchanged from the previous week. Meanwhile, HMS (80:20) offers increased by $2/t to $391/t CFR, up from $389/t CFR in the previous week.

Around 2,000-3,000 t of deals were reported this week, consisting of approximately 1,500-2,000 t of HMS scraps from Brazil, Central America, and Latin America in the range of $385-395/t CFR. Additionally, 400 t of turning boring scrap was sold at $355-375/t CFR and 250 t of PNS from Brazil at $410/t CFR.

Pakistan: Following the elections in Pakistan, market activities have decelerated due to significant delays in LC approvals and payments, resulting in a slowdown in trades. On a weekly average basis, shredded scrap offers from Europe were evaluated at $439/t CFR, reflecting a $2/t decrease w-o-w.

In the domestic market, scrap prices were reported at PKR 165,000-175,000/t ($590-626/t) ex, while rebars were priced at PKR 265,000-275,000/t ($947-955/t) ex, and billets were at PKR 225,000-230,000/t ($804-822/t) ex.

Bangladesh: In Bangladesh, the imported ferrous scrap market saw varied price trends amid moderate activity. Containerized shredded scrap from the UK and Europe increased by $4-5/t, while HMS (80:20) offers slightly decreased to $413/t CFR Chattogram.

Approximately 6,000-7,000 t of containerised deals were closed, including grades from UAE, Australia, Thailand, and Malaysia.

Japanese H2 scrap ranged from $426-430/t, while US-origin HMS (80:20) bulk indicatives were $431-433/t, with buyer inquiries at $425-430/t CFR Chattogram. HMS (80:20) offers from the US were heard at $408-410/t CFR, and the HMS/PNS mix from the Middle East was priced at $420-422/t CFR, with bids around $414-416/t CFR. Similarly, PNS from the UAE was offered at $435/t, with bids nearly at $430/t CFR.

BigMint's assessment for Europe-origin shredded scrap rose to $438/t, while HMS (80:20) containers remained stable at $414/t.

Japan: The export offers for Japan's H2 scrap remained steady throughout the week, with opposing pressures from both buyers and sellers offsetting each other, thus ensuring market stability. As a result, BigMint's weekly assessment of the Japanese H2 scrap export offers remained flat w-o-w at JPY 52,000/t ($345/t) FOB Tokyo Bay.

According to the Japan Iron and Steel Association, the average price of H2 furnaces in three regions for iron scrap in the third week of February increased by JPY 300/t ($2/t) from the previous week, reaching JPY 49,000/t ($325/t). Notably, the Kanto region saw a JPY 1,000/t ($7/t) rise to JPY 50,200/t ($333/t), while the Chubu and Kansai prices held steady at JPY 47,800/t ($317/t) and JPY 49,000/t ($325/t), respectively.

Vietnam: Following the Lunar New Year holidays in Vietnam, purchasing activities remained restrained due to the volatility in Chinese futures, alongside subdued sentiments in the domestic downstream market.

A trader remarked, "Although there were active offers for Japanese scraps to Vietnam, as Taiwan and Korea stayed on the sidelines, there was no significant interest from Vietnamese buyers due to uncertainty in the domestic market resulting from fluctuating Chinese futures."

Export offers for Japanese H2 scrap were evaluated at $395-400/t CFR Vietnam.