Weekly round up: Global ferrous scrap prices decline on weakening steel demand
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The global ferrous scrap market experienced a week of falling prices and cautious purchasing, due to sluggish demand from major importing countries. In Turkey, scrap prices dropped as mills opted for cheaper Asian billets, worsening the market decline. In India, weak demand and price differences have led to an increased use of DRI and sponge iron, while imported scrap prices remained steady. Pakistan's market was subdued due to weather conditions and cash flow issues, resulting in cautious buying. In Bangladesh, low buying interest and political instability are affecting scrap prices and market conditions. Meanwhile, Japanese H2 scrap export offers dropped amid JPY appreciation.
Turkiye: Turkish imported ferrous scrap prices from the US fell by $11/t w-o-w, hitting their lowest level in nearly 10 months following a recent US-origin scrap deal. The market experienced a sharp decline, with the index dropping to $360/t CFR after confirmed deals at this level. Recyclers had to accept lower prices as mills continued to push for reduced costs, and some buyers speculated that prices might fall further to $350/t CFR. The situation has worsened due to declining iron ore prices and a significant surplus of unsold scrap inventory, which had been accumulated at higher prices earlier in the month.
BigMint's assessment for US-origin HMS (80:20) bulk scrap stood at $360/t CFR, down by $14/t w-o-w and for bulk HMS (80:20) from the US East Coast stood at $333/t FOB, down $14/t w-o-w.
India: In India, demand for imported scrap remained subdued as buyers largely stayed away from the market, preferring domestic alternatives that offered better value. The downturn in the Turkish market had a ripple effect, leading Indian buyers to anticipate further price drops and hold off on significant purchases. Offers for shredded scrap from the US and UK/Europe lingered around $393-398/t CFR Nhava Sheva, but buyer interest was minimal, with many looking for prices below $390/t. Similarly, HMS (80:20) offers from the UK/Europe at $370-375/t CFR saw little traction. The wide bid-offer gap, coupled with sluggish finished steel sales and higher reliance on DRI and sponge iron, kept the market stagnant. Some southern Indian mills showed slight interest but only if prices hit $365/t. Overall, the market sentiment was cautious, with players waiting for prices to bottom out, likely by September, before resuming bulk purchases.
Pakistan: Last week, Pakistan's imported scrap market was marked by caution and sluggishness. Buyers largely adopted a wait-and-see approach due to the ongoing rainy season, which dampened domestic steel demand and strained cash flows due to delayed payments. Indicative offers for shredded scrap from the UK/Europe were around $395-400/t CFR Qasim, but market activity was minimal as buyers anticipated a more stable price trend. HMS (80:20) from the UAE was offered at $380-382/t CFR. The market faced additional challenges as adverse weather conditions slowed construction activities, and domestic rebar demand remained moderate. Overall, sentiment was muted, with most participants holding off on significant purchases until clearer market trends emerged.
Bangladesh: This week, Bangladesh's imported ferrous scrap index fell due to weak buying interest and ongoing political instability. Buyers are exercising caution, anticipating further price drops as international offers soften. Market participants noted that a major Bangladeshi steel mill has ample stock and is unlikely to make substantial purchases until October. A supplier reported that shredded scrap offers from the US were at $400/t CFR Chattogram, while those from Australia were slightly higher at $410/t CFR. Offers for HMS (90:10) from Brazil were at $390/t CFR Chattogram. Additionally, the recent rise in domestic rebar prices has led buyers to be more cautious, postponing large-scale scrap imports.
Japan: Japanese H2 scrap export offers fell for the fourth consecutive week due to a cautious stance from buyers and sellers. While offers decreased in JPY terms, they rose slightly in USD terms. The market remained quiet, with participants watching exchange rate fluctuations and the weakening seaborne market without making significant moves. In Japan's Kanto region, scrap prices dropped by JPY 1,000/t($3/t), bringing H2 to JPY 44,500-45,500/t ($305-311/t). This followed similar cuts by Tokyo Steel and Totetsu, with H2 prices at JPY 46,500/t ($318/t) due to JPY appreciation.
China: Chinese steel scrap prices plummeted last week due to market pessimism and domestic steelmakers' insistence on lower buying prices. Steelmakers, facing significant losses on steel sales, urged suppliers to cut scrap prices to help reduce their operating costs.
