Weekly round-up: Imported ferrous scrap markets active in India and Turkiye; prices rise w-o-w

The global ferrous scrap market saw a flurry of trade activities towards the end of the week, especially in Turkiye and India. In Turkiye, the frequency of bulk deals from the US and Europe increased albeit slightly higher prices in the latest round of deals some 10 days back. HMS (80:20) prices rose by $2-4/t w-o-w. India benefitted from timely LC issuance and active bookings.

While Pakistan faced LC-related challenges despite steady demand, Bangladesh grappled with stagnant market sentiment due to LC issues. Japan saw stable export offers amid weak demand, while Vietnam witnessed mixed price movements during the holiday period.

Turkiye: Turkish steel mills re-entered the ferrous scrap market with significant trading activity, sealing a total of 7-8 transactions in a short span. These transactions involved scrap shipments originating from the US, Europe, and the Baltic region, with deliveries scheduled between late September and late October. This resurgence in booking had a positive impact on prices compared to rates reported just a couple of weeks ago.

Notably, HMS 1/2 (80:20) prices rose by $2-4/t w-o-w to a range of $376-$379/t CFR. In contrast, rebar prices experienced a slight decrease, falling by $5/t to $580/t, maintaining a 205-207/t conversion gap between scrap and rebar compared to last week. Billet prices increased by $15/t to $505/t CFR Iskenderun.

India: The Indian market saw active bookings for shredded scrap from Europe at the beginning of the week. Offers fell slightly towards weekend experienced a marginal decline, settling at $435/t CFR Nhava Sheva on September 8, 2023. Indian steel mills were quick to respond, booking around 8-10 bulk cargoes at prices ranging from $415 to $425/t, driven by favourable demand for finished steel products. One significant advantage for India in this market is the timely issuance of letters of credit (LCs), which stands in contrast to the significant delays faced in neighbouring countries like Pakistan and Bangladesh. Importers in India also explored sources beyond traditional markets, with small parcels booked from Australia, West Africa, and Latin America.

Imported melting scrap prices at Nhava Sheva Port were around $420/t, equivalent to approximately INR 37,902/t, and local scrap prices in Mumbai increased by INR 300/t, reaching INR 36,800/t.

Pakistan: In Pakistan, the demand for imported scrap remained steady, but significant volumes were not realised due to issues related to letters of credit (LCs). Offers for containerised shredded scrap from Europe were priced at around $438-$440/t CFR Qasim. Recent market activity indicated deals within this range, involving a total volume of approximately 6,500-7,000 t on a CFR Qasim basis. In the domestic market, scrap was being traded at PKR 200,000/t ($657/t), and rebar prices stood at PKR 294,000/t ($965/t).

Notably, leading Pakistani steel manufacturers initiated a price adjustment by increasing rebar prices by PKR 5,000-7,500/t due to material shortages and rising energy costs. This price adjustment was implemented by several companies, including Amreli, Faizan, ASG, Agha, Rajput Steel, Mughal, Naveena, and Union Steel. The Pakistani rupee (PKR) continued to depreciate, with the exchange rate standing at around PKR 307 in the interbank market and PKR 324 in the open market. Currency dealers noted a persistent demand for dollars, which kept the exchange rate under pressure.

Bangladesh: In Bangladesh, the imported ferrous scrap market faced stagnation primarily due to challenges in securing letters of credit (LCs) from banks. Despite the eagerness of steel mills to procure scrap, the hurdles in obtaining LCs deterred them from entering into contracts with sellers. Throughout the week, reports indicated prices for busheling scrap and PNS scrap from Malaysia at $465/t and $455/t on a CFR Chattogram basis.

Bids were heard for shredded scrap from Europe at around $430-$435/t and for containerised HMS (80:20) scrap at $420-$422/t. However, sellers were reluctant due to concerns about narrower profit margins.

Local scrap prices in Bangladesh experienced a relative decline, with HMS (80:20) at BDT 58,500/t ($533/t) and local PNS scrap at BDT 61,000/t ($556/t) ex-Chattogram. Rebar prices exhibited regional variations, with prices in Chattogram ranging from BDT 94,000-$95,000/t ($857-$866/t) and in Dhaka from BDT 84,000-$85,000/t ($766-$775/t).

Japan: Japan's ferrous scrap (H2) export offers remained stable, as market participants adopted a wait-and-watch approach ahead of the Kanto Tetsugen tender scheduled for 12 September. SteelMint's weekly assessment of Japanese H2 scrap export offers on a FOB basis remained unchanged at JPY 50,500/tonne (t) ($343/t) compared to the previous week. Steel producers in Japan adjusted their bids following Tokyo Steel's price cut announcement, reducing bids by about JPY 1,000/t for its Utsunomiya works. This adjustment was driven by higher scrap inventory levels and scheduled maintenance until 7 September.

Vietnam: The demand for imported scrap in Vietnam remained subdued, as the country observed its National Day holiday. Price movements during the week were mixed, with most buyers opting to stay on the sidelines, choosing to explore attractive options in the local market. H2 offers for Vietnam fell consistently within the range of $385-$390/t CFR, while purchase offers from buyers remained below the $380/t CFR mark. Furthermore, bulk HMS (80:20) scrap offers, originating from the US, were priced at $395 to $405/t CFR Vietnam, reflecting a slight increase compared to the previous week.