Weekly round-up: Imported scrap offers see downward trend w-o-w; market sluggish before winter holidays

Global scrap prices experienced a w-o-w downtrend of approximately 1-4%, attributed to subdued purchasing activity in South Asian markets. In India, the combination of price disparities and the availability of previously booked materials have led buyers to adopt a cautious approach. Meanwhile, limited activities were observed in Pakistan and Bangladesh, influenced by a sluggish finished steel market and political unrest in anticipation of upcoming elections. In Turkiye, reduced trading activity prevailed as mills adjusted prices downward in response to the limited demand for finished steel.

Japanese export offers also saw a decline, primarily due to a lack of buying interest from Taiwan, Vietnam, and South Korea.

Turkiye: The Turkish imported scrap market experienced a slow negotiation process and reduced trading activity as mills sought lower prices due to limited demand for finished steel. Sellers maintained firm indicative offers despite a pause in Turkish mills' interest. The holiday season contributed to mixed sentiment. Seller targeted for US-origin HMS (80:20), which were at $430/t CFR, and EU-origin targets were at least $420/t CFR. Baltic-origin HMS (80:20) was offered at $423/t CFR.

Market sources expect no significant changes before the holiday season, with Turkish mills noting a lack of demand for finished steel and scrap due to high logistics costs. Although perceived as a buyers' market, sellers held prices at around $420-$425/t CFR. Futures traders anticipate a slight price correction, reflecting in a drop in the futures contract for Turkish imports of ferrous scrap on LME.

SteelMint's assessment for the US-origin bulk HMS (80:20) declined by $3/t w-o-w, reaching $424/t CFR Turkiye.

The scrap-to-rebar spread was assessed at $175-180/t, and rebar export offers hovered around $600-605/t on an FOB basis.

In monetary policy news, Turkiye's central bank increased its key interest rate by 250 basis points to 42.5%, aiming to combat inflation and bring real rates into positive territory. The central bank anticipates inflation to peak at 70-75% in May, easing to around 36% by the end of next year. The Turkish lira remained relatively stable post-announcement.

India: The demand for imported scrap in India remained subdued throughout the week due to discrepancies in prices and the presence of previously committed materials. The weekly average offers for shredded scrap from Europe recorded at $414/t CFR Nhava Sheva reflected a decrease of $11/t compared to the previous week's $425/t CFR. Additionally, HMS (80:20) scrap offers also saw a decline, dropping by $10/t w-o-w to $394/t CFR.

A spokesperson from a trading company commented on the current market situation, stating, "The market is currently undergoing a significant downturn. There is an oversupply of distressed cargo for sale, and buyers are exercising caution, showing reluctance to engage at higher price levels."

Notably, specific transactions included the booking of 500 t of shredded scrap from Poland at $415/t CFR Chennai, approximately 500 t of HMS (80:20) scraps from West Africa at $390-395/t CFR Chennai, and 500 t each of turning boring and LMS bundles from the Netherlands and West Africa at $370-375/t CFR Chennai.

Pakistan: In Pakistan, the demand for imported scrap remained lackluster, attributed to the year-end closing and sluggish steel sales in the domestic market. The prevailing liquidity issues and political unrest ahead of the upcoming elections in February further contributed to the subdued demand. The weekly average offers for shredded scrap from Europe saw a decline, dropping by $7/t to $427/t CFR Qasim, compared to the previous week's $434/t CFR.

In the domestic market, major steel mills reduced scrap prices by PKR 8,000/t ($28/t). The revised prices for rebar (grade 60) with effect from today stand at around PKR 259,000-259,500/t ($917-924/t) for 9.5/10 and 12mm, and PKR 257,000-257,500/t ($915-917/t) for 16mm and above.

Notably, 3000-t of shredded scraps from the Middle East were booked at $430-440/t CFR Qasim during the week.

Bangladesh: In Bangladesh, imported ferrous scrap offers dropped by $11/t w-o-w due to limited activity, winter weather, and concerns about the January 7 elections. However, around 10,000 t of containerised scraps were booked, including HMS bundle scraps from Hong Kong at $410/t, the Middle East HMS scraps at $405/t, Australian HMS (80:20) at $413-416/t, UK shredded scraps at $428/t, and Australian HMS (80:20) at $410/t CFR Chattogram.

Containerised shredded scrap offers from Europe were $435/t, and HMS (80:20) stood at $415-418/t CFR Chattogram. Bulk HMS (80:20) from the US West Coast was at $428-430/t CFR, and Japan-origin H2 bulk indicatives were at $420-425/t CFR Chattogram.

Domestic steel sector activity remained subdued amid limited project activities as local ship-breaking scrap offers ranged from BDT 61,000-63,000/t, PNS-grade scrap at BDT 65,000-68,000/t. Rebar from rolling mills was offered at BDT 88,000-91,000/t exw Dhaka, while primary mills priced products above BDT 97,000-99,000/t exw Chattogram. Billet offers were at around BDT 73,000-76,000/t exw.

Japan: The export offers for Japan's H2 scrap experienced a decline of JPY 800/t ($6/t) this week, following six consecutive weeks of increases. The decrease can be attributed to diminished demand from the traditional import markets and a weakened Japanese yen against the USD. SteelMint's weekly assessment of the H2 scrap export offer stood at JPY 51,000/t ($358/t) this week in comparison with JPY 51,800/t ($364/t) a week ago.

In the Nagoya region, ferrous scrap prices ranged from JPY 35,500-36,500/t amid limited availability, as reported earlier by SteelMint.

South Korea: South Korean mills refrained from participating in the seaborne H2 grade market because domestic scrap prices were still lower than imported scrap.

The collective steel scrap inventory across eight South Korean steel companies stood at 946,000 t. In comparison to the previous week, this reflected a reduction of 33,000 t, equating to approximately 3.5%.

China: China's Shagang Steel increased ferrous scrap procurement prices by RMB 50/t ($7/t) for all grades from 19 December, leading to a cost of RMB 2,960/t ($415/t) for HMS (6-10 mm) inclusive of 13% VAT as against RMB 2,910/t (408/t) on 9 Nov'23, delivered to their headquarters.

China's scrap imports jumped to 17,475 t in November, an increase of 19% from 14,683 t in the previous month. However, imports dropped by a whopping 78% from 77,820 t in the same period last year.

Vietnam: During the week, Vietnamese mills displayed minimal interest in Japanese H2 scrap imports, citing a notable difference between bid and offer prices. While Japanese H2 scrap export offers to Vietnam were reportedly in the range of $400-405/t CFR, feasible and acceptable levels were noted at $390/t CFR.