Weekly round-up: Imported ferrous scrap prices rise w-o-w except in South Asia

The global ferrous scrap prices increased slightly which led to a slower movement in the market as compared to the last week yet few markets in South Asia witnessed a declining trend in terms of prices, particularly in India and Pakistan. Turkish mills had been purchasing scrap, however, at a slower pace. Indian buyers had adopted a cautious stance, expecting further corrections in offers. Some containerised deals were concluded during this time, but they were at lower prices compared to the previous week.

In the middle of the week, Bangladeshi steel mills were active in the market, securing a few bulk cargoes. However, the looming elections and weak economic conditions, coupled with issues related to the opening of Letters of Credit (LCs), had kept buyers watchful in Bangladesh and Pakistan. In terms of the Far East market, the Kanto tender for September 2023 concluded at a slightly higher price yet South Korean and Vietnamese mills showed a preference for locally sourced scrap.

Turkiye:: The Turkish imported scrap market remained stable with limited new deep-sea contracts due to cautious producer sentiment amid challenges in the finished steel sector. HMS (80:20) prices rose by $2/t to $377/t CFR, while rebar prices fell slightly to $570/t, narrowing the scrap-rebar price gap. Billet prices held steady at $505/t CFR Iskenderun.

Although price adjustments were possible, export demand was low. Domestic rebar sales in Turkey were limited, with small volumes traded at $575-$580/t ex-works.

Turkish steel mills continued to restock imported scrap with three US deals. But they were hesitant to rush into selling finished steel due to narrow production margins. Offers above $380/t CFR for HMS (80:20) were met with caution.

India: The market for imported ferrous scrap experienced sluggishness this week. Steel mills opted to hold their procurements coupled with the noticeable gap between bid and offer prices.

Furthermore, it is expected that demand will continue to remain subdued due to upcoming festivities, as finished steel sales have been subdued, leading to reduced scrap consumption.

Notably, offers for shredded scrap from the UK have declined by $5/t w-o-w, falling from $437.4/t last week to $431.6/t CFR Nhava Sheva this week.

Throughout this week, a few deals were heard from West Africa, Europe, South America, the US, and Australia.

Imported HMS (80:20) scrap CFR Nhava Sheva was around $414/t, equivalent to approximately INR 36,407/t and local HMS (80:20) DAP Mumbai was at INR 36,700/t.

Pakistan: This week, the imported ferrous scrap market in Pakistan was bearish. Steel mills were disinterested in making large bookings in anticipation of further decline in offers. A few steel mills had booked small quantities during the week in the price range of $435-440/t. However, post these bookings, bids fell below $435/t levels. In a recent development, fuel prices increased amid an increasing trend of international petroleum prices effective from 16 September.

In the domestic market, rebars were being offered at PKR 285,000/t (down PKR 5,000/t) while billets were at PKR 246,000/t (down PKR 9,000/t).

Notably, the recent appreciation in PKR against the US dollar is impacting trades, buyers are seeking more clarity.

Bangladesh: The imported ferrous scrap market in Bangladesh faced challenges due to the monsoon season and reduced government infrastructure spending, resulting in canceled deals and decreased demand. In contrast, Europe maintained a stable scrap supply. Bangladeshi mills are restocking, having purchased 4-5 bulk cargoes, with bulk scrap deals at $425-$435/t for shredded scrap. Scrap was sourced globally, from Australia, the US, Malaysia, and Oman.

Local scrap prices in Bangladesh have dropped, with HMS (80:20) at BDT 56,500/t($515/t) and local PNS scrap at BDT 58,000/t ($528/t) ex-Chattogram. Rebar prices vary regionally, with prices in Chattogram at BDT 92,000-94,000/t($838-857/t) and in Dhaka at BDT 82,000-83,000/t. ($747-756/t).

Japan: Japan's ferrous scrap (H2) export offers remained volatile, with prices increasing by JPY 500/tonne (t) ($3/t) w-o-w, following the recent hike in scrap purchase prices announced by Tokyo Steel. Earlier this week Japan's Kanto Tetsugen scrap export tender for September 2023 has concluded, with bid prices increasing by JPY 1,517 ($10/t) compared to August. A total of 15,000 t of H2 scrap was awarded at a price of JPY 51,316/t ($351/t) FAS to Bangladesh, according to sources.

South Korea: POSCO raised its bid for Japanese ferrous scrap, JPY 57,000 for shredded and JPY 57,500 for HS, up by JPY 1,000 and JPY 500, respectively, from the previous week. This week, the influx of new ferrous scrap into South Korea plummeted by more than 41%, dropping to 29,600 tonnes (t) from the previous week's 50,200 t. It may be noted here that this week's arrivals also include domestically sourced scrap transported by sea, which means that the actual volume of fresh scrap entering Korea is even lower.

Vietnam: Imported scrap prices in Vietnam remained unchanged w-o-w, as sellers shifted their focus to more lucrative markets, while buyers hesitated due to high prices. Suppliers from the US increased their offers, responding to strong South Asian demand. But Vietnamese buyers found US deep-sea bulk offers too expensive, given the prolonged weakness in domestic steel prices.

Vietnamese steel firms have been grappling with a significant drop in production amid a weak domestic steel market, and are more focused on locally sourced scrap over imports from Japan.