South Asia: Imported ferrous scrap market cautious, Indian buyers on sidelines
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South Asian ferrous scrap market participants remained cautious as Indian buyers adopted a wait-and-see approach as imported scrap was unviable compared to domestic prices. Meanwhile, in Pakistan, imported scrap purchases have slowed amidst operational challenges, while in Bangladesh buyers are leaning towards container shipments over bulk due to LC issues. Market activities remain sluggish across regions.
Shredded scrap offers remain unchanged in India, while prices edged up by $1/t in Pakistan and $3/t in Bangladesh. US bulk HMS (80:20) offers inched down by $1/t d-o-d for Turkiye.
Overview
Indian buyers have adopted a cautious approach, largely due to the unviability of imported scrap compared to domestic market prices. Additionally, market activities have been sluggish due to the week-long holidays during the Holi festival, with some buyers still in a holiday mode.
Shredded scrap offers from the US and Europe have been observed at around $408-415/t CFR, while HMS (80:20) prices ranged from $375-388/t CFR.
Notably, a bulk vessel carrying approximately 25,000 t of mixed shredded and HMS scrap is anticipated to arrive on Indian shores by the end of March.
Imported ferrous scrap purchases in Pakistan has experienced a notable slowdown. Market insiders report that numerous mills are functioning at decreased capacities, with production rates averaging around 30-40%, and certain smaller mills ceasing operations entirely. This decline, more severe than the typical slowdowns associated with Ramadan, is compounded by irregular cash flows and escalating utility expenses, including heightened electricity tariffs.
Shredded scrap offers from Europe have been evaluated at $415-420/t CFR, while those from the UAE are at $425-430/t CFR. Meanwhile, HMS (80:20) offers from the UAE are standing at $400-405/t.
In Bangladesh, buyers are showing a preference for container shipments over bulk due to challenges related to Letters of Credit (LC). Additionally, there's a trend among buyers to seek quicker shipment destinations such as Australia, Hong Kong, Singapore, and Malaysia. European scrap prices remain unviable for Bangladeshi buyers, prompting them to explore alternatives. Indicative offers for shredded scrap from Europe were reported at $415/t, whereas offers from Australia stood at $418/t CFR.
A trader said, "We are not receiving offers from Europe, and the UK market is completely off. European prices are not feasible for Bangladesh. Bulk transactions are slow due to LC issues."
Turkish deep-sea scrap prices remained largely stable with increased April shipments. Offers for 80:20 scrap were heard at $389/t CFR. Despite target levels reaching $400/t CFR Turkiye, no increase beyond $390/t was confirmed. Turkish mills resisted higher offers due to sluggish rebar sales. Shortsea scrap market sentiment was bullish, with Balkan-origin HMS (80:20) target level at $370/t CFR Turkiye, though tradable values remained at $365/t CFR.
Price assessments
India: UK-origin shredded scrap indicatives were assessed at $415/t CFR Nhava Sheva, unchanged d-o-d.
Pakistan: UK-origin shredded scrap indicatives were assessed at $419/t CFR Qasim, up by $1/t.
Bangladesh: UK-origin shredded scrap prices were assessed at $415/t CFR Chattogram, up by $3/t.
Turkiye: US-origin HMS (80:20) bulk prices were assessed at $389/t CFR Turkiye, down by $1/t.
