Weekly round-up: Global ferrous scrap prices on downward trend amid average trading

Global ferrous scrap prices experienced a downward trend during the week, characterised by moderate trading activity. Indian buyers persisted in their resistance to booking fresh scraps from the seaborne market due to price disparities, with only a few deals being concluded, primarily involving arrival cargoes. In Pakistan, market activities slowed down following the elections and a sluggish domestic steel market. Similarly, the Bangladesh market also witnessed a stable week, with a few deals under negotiation.

Japanese export offers remained unchanged from the previous week, as major importing nations were still observing Lunar New Year holidays, resulting in no significant bids being heard.

Turkiye: Turkish imported ferrous scrap prices saw a decline of $3/t w-o-w, averaging $417/t CFR compared to $420/t CFR the previous week. This drop in prices was driven by pressure from Turkish mills amidst uncertainty surrounding recent VAT regulation changes, leading to sluggish domestic rebar sales and impacting the scrap market alongside the weakening Lira.

Tradable values for US and Baltic-origin HMS (80:20) were typically observed between $415-417/t CFR, with sellers maintaining firm positions despite market dynamics. Collection costs in the Benelux region were reported at Euro 345-350/t delivered to docks, indicative of prevailing sentiments within the market. Approximately 6-8 bulk cargos were booked during the week, originating from the US, Europe, Russia, France, and the Netherlands, with the majority comprising HMS (80:20) and PNS scraps.

BigMint's assessment for US-origin bulk HMS (80:20) experienced a marginal decline of $5/t, which stood at $415/t CFR Turkiye. The scrap-to-rebar spread stood at $195/t, with Turkish exported rebar assessed at $610-612/t FOB Iskenderun.

India: This week, market activities in India remained lacklustre as buyers leaned towards domestic scrap procurement and other available alternatives due to a significant gap between landed imports and domestic scrap prices. On a weekly average basis, import offers for shredded scrap from Europe edged up slightly by $1/t to $416/t CFR Nhava Sheva from $415/t CFR in the previous week, while HMS (80:20) offers dropped by $9/t on the week to $389/t CFR.

A representative from a trading company remarked, "The current market suggests that shredded scrap should not exceed $400/t. However, indicative prices from the EU/UK are higher at $430-435/t, creating a $30/t gap that makes it economically unviable."

Another trader commented, "Imports have become economically impractical in India, leading buyers to favor local sources or alternatives like sponge. The few transactions happening involve arrival cargoes, with the maximum price for HMS capped at $385/t. Fresh bookings in the market are currently scarce due to these prevailing circumstances."

Throughout the week, approximately 1,000 t of shredded scraps were sold at $419/t CFR, followed by 500 t of HMS (80:20) at around $365-370/t CFR and around 250 t of turning boring scraps at $345/t CFR.

Pakistan: During the week, imported scrap buying slowed down in Pakistan due to uncertainty surrounding the recent elections on 8 February. Market sources indicated that a shortage of scrap in the domestic market led buyers to engage in need-based purchasing, resulting in delayed payments. Additionally, the domestic steel market experienced a slowdown, with a few mills announcing price hikes. For example, both Amreli Steel and Faizan Steel recently increased prices for grade 60 rebars by PKR 3,000/t ($11/t), effective from 12-13 February. Revised prices ranged from PKR 274,000-276,500/t ($979-988/t) for 9.5/10 mm and 12 mm rebars, while prices for 16 mm and above were noted at PKR 272,000-274,500/t ($972-981/t).

On a weekly average basis, shredded scrap offers remained unchanged at $441/t CFR Qasim compared to the previous week.

Furthermore, approximately 4,000-5,000 t of shredded scraps were booked at around $439-445/t CFR Qasim, followed by around 1,400 t of HMS 1 from Kuwait at $420-425/t CFR.

Bangladesh: In Bangladesh, market activities remained relatively stable this week, with nominal deals reportedly in the negotiation process. Shredded scrap offers from Europe were observed at $432-435/t CFR Chattogram, while offers from the US stood at $428-430/t CFR, and those from Australia were assessed at $430-432/t CFR. Deals involving Shredded and PNS from Australia ranged from $430-443/t, followed by PNS from Malaysia at $438/t.

HMS (80:20) offers from the US were heard at $404-408/t CFR, and HMS/PNS mix from the Middle East was priced at $420-425/t CFR.

Bulk HMS (80:20) indicatives hovered around $415/t and $420/t for shredded bulk, with shredded from the US West Coast at $425/t. HMS (90:10) scraps in 20 ft from Canada were offered at $420/t CFR, with bids around $408/t CFR levels.

In the domestic market, rebars were priced at BDT 92,000-94,000/t ($838-856/t) ex-Chattogram and BDT 84,000-87,000/t ($765-793/t) ex-Dhaka. Billets were noted at BDT 76,000-77,000/t ($692-702/t) ex-Dhaka.

Japan: Japan's H2 scrap export offers remained unchanged w-o-w owing to muted demand from major importing countries due to the Lunar New Year holidays. BigMint's weekly assessment of the Japanese H2 scrap export offer was flat w-o-w at JPY 52,000/tonne (t) ($346/t) FOB Tokyo Bay. As per market sources, FAS collection prices in Kanto Bay stood at around JPY 51,500-52,000/t ($343-346/t).

In the domestic market, the price of H2 furnaces in three regions this week was JPY 48,700/t ($324/t), the same as last week. By region, prices in Kansai fell by JPY 100/t ($0.66/t) to JPY 49,000/t ($326/t), but prices were unchanged from last week at JPY 49,200/t ($327/t) in Kanto and JPY 47,800/t ($318/t) in Chubu, according to the Japan Iron and Steel Association's latest release.

Vietnam: Steel mills in Vietnam remained quiet throughout the week due to the extended Lunar New Year holiday. Consequently, there was minimal trading activity, with no firm offers or bids observed during this time. The most recent offers for US-origin HMS (80:20) bulk scrap were in the range of $406-410/t, while indicative prices for H2 stood at $398-402/t CFR Vietnam.

South Korea: Seaborne market activity for South Korean mills remained low as they favoured domestic scrap, which became more economically advantageous following recent price reductions by domestic mills prior to the holidays.

The ferrous scrap inventory of the eight leading South Korean steel companies in the second week of February stood at 798,000 t. This marks an increase of approximately 3.7% from the previous week's inventory of 769,000 t.

In January 2024, South Korea recorded a notable decline in ferrous scrap imports, amounting to 127,477 t. This figure represents a substantial decrease of 44% from the 227,089 t reported in December 2023. Furthermore, on a yearly basis, there was a significant drop of 58% compared to the 301,742 t imported in January 2023.