Weekly round-up: Global scrap market witnesses mixed price trends, Turkiye remains active in restocking

The global ferrous scrap market remains slow especially in Pakistan and Bangladesh while the Turkish market remains active, especially for low prices EU-origin materials where HMS prices dipped to $355-358/t CFR amid an oversupply.

Similarly, India's market shows signs of recovery despite initial bid-offer mismatches, while Pakistan faces challenges due to sluggish steel demand and tight cash flows, with a rising optimism post-IMF support.

Bangladesh's imported deals were limited by financing constraints and further lowering in bulk offers.

Vietnam's demand for Japanese scrap is weak, and South Korea continues to prioritise local over imported scrap.

If we consider scrap exporting markets, in Japan, H2 export offers declined further, and US scrap exports faced reduced inquiries, contributing to a $2/tonne drop amid market uncertainty.

Turkiye: At the beginning of the week, HMS (80:20) scrap prices dipped to $360-365/t CFR, driven by weak demand and an influx of European recyclers eager to sell their materials. The widening gap between US and EU scrap prices indicated that Turkish mills were willing to pay a premium for essential materials, reflecting a strategic approach to maintaining profitability in a competitive landscape.

Moreover, Turkiye's imported scrap market showed a slight uptrend, with US-origin HMS (80:20) offers remaining steady at $368/t CFR. Although the oversupply of European scrap may exert downward pressure on prices, the strengthening of the domestic rebar market could prompt Turkish mills to pursue higher scrap prices to safeguard their margins.

Throughout the week, around 12-14, deals were finalised from both the US and Europe at prices ranging from approximately $357-368/t CFR.

India: At the start of the week, India's imported scrap market slowed down due to continuing bid-offer disparities making it hard to close deals.

Shredded scrap from the US and UK/Europe was offered at $385-390/t CFR, while HMS (80:20) was priced at $360-370/t. Buyers, however, placed bids $8-12/t lower, preferring domestic scrap for its lower cost.

By mid-week, the market showed signs of improvement as domestic billet and ingot prices increased, leading to more interest in imported scrap, especially HMS grades, though demand for shredded scrap remained weak.

Offers for South African and American hand-loaded HMS were at $380-390/t CFR Nhava Sheva, while bids were lower at $365/t CFR.

For southern India, offers from Australia were at $380-385/t for shredded scrap and $365-370/t for HMS (80:20). European, Polish, and South African offers were at $375-380/t for HMS (80:20), $390/t for HMS (90:10), $396-400/t for shredded scrap, and $410-415/t for busheling.

Toward the weekend, domestic scrap prices remain strong, and there is no immediate rush to import. While prices are trending higher, Indian buyers are weighing other raw material costs before committing to deep-sea purchases.

Pakistan: Pakistan's imported scrap market experienced a slight downtrend due to a sluggish domestic steel market and tight cash flows. Rebar demand remained weak as construction activities slowed, with steel production operating at only 40-60% capacity.

However, Offers for shredded scrap from the UK and EU were consistently reported at $390-395/t CFR Qasim, yet buyer interest remained minimal primarily due to high interest rates and cash flow constraints exacerbated by impending electricity and gas bills.

Despite these challenges, a glimmer of optimism emerged following the IMF's approval of a $7 billion extended fund facility, which is expected to enhance liquidity and stabilise the economy in the long term.

Bangladesh: Bangladesh's imported scrap market remained sluggish, driven by sluggish steel demand and adverse weather conditions. Buyers exhibited limited interest in new imports, largely due to difficulties in opening letters of credit (LCs) and the ongoing rainy season, which has disrupted construction activities and government projects.

Offers for small volumes of Australian and Brazilian HMS were purchased, with buyers seeking Australian HMS at $370-375/t and shredded scrap at $390-395/t, though supplies remained scarce. Australian and New Zealand-origin offers were higher at $400-410/t CFR. Domestic scrap Rebar prices remained range-bound, at BDT 82000-83,000/t in Dhaka and BDT 87,000-88,000/t in Chattogram, while local HMS was traded at BDT 52,000-54000/t. The floods have severely impacted demand, delaying economic recovery and stalling the steel market.

Vietnam: Vietnam's demand for imported Japanese scrap remains weak, with H2 offers dropping to $320-$325/t CFR. Local buyers are hesitant to bid above $320/t, reflecting cautious market sentiment and no concluded deals. In contrast, domestic scrap prices are stable, with Type 1 scrap in northern Vietnam priced at VND 8,900-9,500/t ($362-$386/t) due to tight supply from Typhoon Yagi and flooding. Stricter taxation investigations may further increase domestic prices.

South Korea: In South Korea, demand for Japanese scrap remains weak despite falling prices, with buyers finding no cost advantage in imports. Although Japanese H2 prices are now lower than domestic Light A scrap, mills continue to prefer local sources. Domestic scrap prices have stabilized post-Chuseok, while some steelmakers have raised rebar prices to address cost pressures, indicating stable demand.

Japan: This week, Japanese H2 scrap export offers continued to decline, influenced by weak buying interest and heightened competition from other countries. Japanese suppliers are cautious, anticipating a potential price rebound due to optimism in the Chinese market following recent economic stimulus measures. Consequently, only a few suppliers are actively participating in the seaborne market.

BigMint's latest assessment pricing H2 scrap at JPY 40,300/tonne ($282/t) FOB Tokyo Bay, down from JPY 40,500/t ($283/t).

Additionally, In domestic markets Tokyo Steel, Japan's leading EAF steel producer, has implemented its ninth consecutive cut in scrap procurement prices, reducing them by up to JPY 1,000/t ($7/t) across all plants as of September 27. This brings September's total price drop to JPY 5,500-6,500/t ($38-45/t), with H2 scrap now priced between JPY 38,500-40,500/t at Tokyo Steel's facilities.

US: The US ferrous scrap export index dropped by $2/tonne w-o-w, driven by limited inquiries from major buyers like Turkiye and Bangladesh. This lack of demand has resulted in minimal price changes. Additionally, concerns over a potential strike by the International Longshoremen's Association and the upcoming presidential election are contributing to caution among market participants.