Weekly round-up: Global ferrous scrap prices edge up 2% despite limited buying

Global ferrous scrap prices edged up by 1-2% in the South Asian and Turkish markets. Indian buyers observed sluggish activity this week, with a preference for domestic market options due to the upcoming Holi festival and pre-election codes of conduct kicking in. Pakistan and Bangladesh limited their buying pace owing to Ramadan and LC delays. Turkish imported ferrous scrap prices rose as sellers anticipated a restocking surge, influenced by a leading steelmaker's reduction in rebar list prices.

Meanwhile, Japanese H2 scrap export offers remained unchanged due to mixed market sentiments and a depreciation of the JPY against the USD. Moreover, the demand from major importing nations such as South Korea, Vietnam, and Taiwan remained subdued.

Turkiye: Turkish imported ferrous scrap prices edged up as sellers anticipated a restocking surge, boosted by a leading steelmaker's reduction in rebar list prices. BigMint's assessment for US-origin HMS (80:20) bulk scrap was at $386/t CFR, up $8/t w-o-w.

Turkiye's steelmakers delayed imported scrap bookings midweek, which resulted in fresh transactions. However, multiple bookings were made from Europe, the US, and Russia late this week. European dock prices for HMS were Euro 310/t and shredded/bonus at Euro 340/t, up by Euro 5/t from the previous week. Short-sea HMS (80:20) offers ranged from $370-$375/t CFR, with Turkish mills cautious about accepting prices above $360/t CFR.

The repo rate, unexpectedly raised by 500 bps to 50% due to February's 70% inflation, will be impacting the Turkish lira's short-term movement and domestic steel demand. Exporters were cautious about Turkish price increases, attempting to maintain margins amidst uncertainty.

India: The imported ferrous scrap market in India saw sluggish activity this week as buyers opted to stay on the sidelines, enticed by more favourable options in the domestic market. Additionally, with the approaching Holi festival and implementation of pre-election codes of conduct, purchasing in the project segment has slowed, affecting scrap consumption.

On a weekly average basis, shredded scrap offers from Europe rose to $407/t CFR, up by $4/t from $403/t CFR in the previous week. While HMS (80:20) offers edged up by $1/t to $379/t CFR.

A steel mill mentioned that they have temporarily halted bookings until 31 March due to the financial year closure. Moreover, buying interest is subdued at the moment, likely due to the upcoming Holi festival and elections in April.

During the week, notable transactions of 6,000-7,000 t of HMS were secured from West Africa, South America, and Yemen within the price range of $375-385/t CFR. Additionally, 500 t of turning boring were traded at $350/t CFR. No deals were reported for shredded scrap during this period.

Pakistan: The imported ferrous market in Pakistan has experienced a slowdown due to Ramadan and a sluggish domestic steel market. Shredded scrap offers have seen a slight increase on a weekly average basis, rising by $5/t to $413/t CFR, compared to $408/t CFR in the previous week.

Notably, approximately 3,000 t of shredded scrap were secured from the UK and Europe at prices ranging from $412-420/t CFR Qasim.

In the domestic market, the demand for rebars has encountered pressure following the aftermath of the February elections and the onset of Ramadan in early March. Rebar prices were reported to be at PKR 245,000-255,000/t ($881-916/5t), with scrap prices at PKR 155,000-160,000/t ($557-575/t) and billet prices at PKR 218,000-225,000/t ($783-809/t).

Bangladesh: Imported ferrous scrap offers in Bangladesh rose by $5/t w-o-w due to recent transactions and a slight improvement in the Turkish market. Current shredded scrap offers from the UK and Europe were at $408-410/t CFR Chattogram. However, limited market activity persisted due to LC approval delays and Ramadan. Mills are less inclined towards bulk bookings after securing lots from the US and Australia.

With construction slowing during Ramadan, both longs and scrap markets aren't expected to improve. Japanese H2 scrap offers were $385-390/t, and US-origin HMS (80:20) bulk ranged from $390-395/t, with limited interest in HMS-PNS mix from UAE at $410-$415/t. In the domestic market, rebar prices were at BDT 90,000-95,000/t ($820-866/t) exw-Chattogram and BDT 85,000-89,500/t ($774-816/t) exw-Dhaka, while scrap prices were at BDT 63,500-64,500/t ($579-588/t) exw.

The Bangladeshi steel industry faces challenges with operational costs rising by 65%, impacting loan repayment, due to dollar appreciation, LC difficulties, and high utility prices, urging measures such as loan extensions and austerity.

Japan: Japan's H2 scrap export offers remained unchanged during the week, owing to mixed sentiments in the market coupled with the depreciation of the JPY against the USD. According to BigMint's latest assessment, the Japanese H2 scrap export offer remained unchanged w-o-w at JPY 50,200/ t ($332/t) FOB Tokyo Bay.

Vietnam: Vietnamese buyers exhibited limited interest in purchasing Japanese scrap due to discrepancies between bids and offers, as well as the availability of cheaper domestic scraps and ample inventory. Offers for H2 scrap from Japan were reported at around $378-385/t CFR Vietnam, while bids from buyers were at $370-375/t CFR.

South Korea: South Korean buyers have reportedly withdrawn from the seaborne market, opting instead for opportunities in the domestic market amid subsequent price cuts by domestic mills. Major steel producers in South Korea, including POSCO and Hyundai Steel, intend to decrease scrap procurement prices by KRW 10,000/t ($8/t) effective from 21-22 March. Hyundai Steel anticipates persistently low prices due to weak demand, declining international prices, and decreased profitability, exacerbated by production cuts.

This week, the new iron scrap arrivals surged in South Korea to 78,248 t, a substantial rise from the 35,800 t recorded on 12 March 2024. Daehan Steel and SeAH Besteel led the increase, while Hyundai Steel reported arrivals at Dangjin and Pohang Works. Notably, Masan Port received no iron scrap arrivals.

China: Shagang Steel has announced a reduction in purchase prices for ferrous scrap across all grades, effective from 18 March 2024. The new prices have been decreased by RMB 50/t ($7/t). Consequently, the revised price for HMS (6-10 mm) stood at RMB 2,750/t ($382/t), inclusive of 13% VAT. This marked the fifth consecutive price reduction within this month. It's worth mentioning that the company had also lowered scrap procurement prices by RMB 50/t ($7/t) on 15 March 2024.