The South Asian imported scrap markets are currently experiencing a period of sluggishness, primarily driven by weak demand, liquidity constraints, and the impact of Ramadan.
India: Cautious Buyers and Bid-Offer Gaps
In India, the scenario is characterized by cautious buyer sentiment. Traders are facing a widening bid-offer gap that has led to muted trading activity. Despite a healthy domestic scrap supply, international prices’ uncertainty has kept many buyers on the sidelines.
As of the latest assessments, the price for shredded scrap of UK origin has risen to $376 per ton CFR (Cost and Freight) at Nhava Sheva. This marks an increase of $1 per ton compared to the previous close, indicating some slight upward pricing movement despite the sluggish market conditions. However, this increase is insufficient to stimulate significant trading, as buyers remain hesitant to commit to purchases amidst concerns about fluctuating prices and potential currency devaluation.
The upcoming Holi festival and the end of the fiscal year are expected to further restrict market activity, as many stakeholders prioritize managing their current inventory over engaging in new purchases. The focus on local supply also underscores the cautious approach taken by buyers opting to rely more on domestic sources than imported scrap.
Pakistan: Low Buying Interest and Price Stability
Similarly, the imported scrap market in Pakistan is experiencing challenges that mirror those in India. The onset of Ramadan has led to a notable slowdown in buying interest, compounded by liquidity constraints. The region’s mills resist higher offers, resulting in low bidding activity and limited transactions.
Currently, the price of shredded scrap of UK origin in Pakistan remains stable at $380 per ton CFR at Qasim. This stability comes despite the overall weakness in demand, suggesting sellers are cautious about lowering prices too aggressively in light of the subdued market conditions.
The steel industry in Pakistan is facing its own set of challenges, with demand for steel products remaining low, which in turn affects the appetite for scrap. As mills navigate these difficulties, the lack of significant trading activity indicates a cautious market environment that may persist until broader economic conditions improve.
Bangladesh: Decreased Activity Amid Construction Slowdown
Bangladesh is also feeling the impact of a slowdown, particularly in the construction sector, which is traditionally a significant driver of scrap demand. The market has seen decreased activity as construction projects are delayed or scaled back due to the festive season and associated economic pressures.
UK-origin shredded scrap prices in Bangladesh have been assessed at $380 per ton CFR at Chattogram, reflecting stability in pricing compared to previous assessments. However, the overall market environment remains challenging, with limited buying interest further complicating trading prospects.
Turkiye: Rising Scrap Prices Amid Restocking
In contrast to the South Asian markets, Turkiye has seen increased scrap prices as mills restocked despite weak rebar sales. The optimism among sellers regarding potential strength in the US market is driving this trend.
US-origin HMS (80:20) bulk scrap prices in Turkiye have been assessed at $366 per ton CFR, reflecting an increase of $2 per ton compared to the last close. This upward movement in pricing suggests that, while the local market may be experiencing its own challenges, there is a degree of resilience and optimism among scrap sellers looking to capitalize on future opportunities.
Conclusion
Overall, the South Asian imported scrap markets are currently navigating a complex landscape characterized by weak demand, liquidity constraints, and seasonal impacts from Ramadan. In India and Pakistan, the cautious behavior of buyers amid widening bid-offer gaps and stable pricing indicates a market that is struggling for momentum. Bangladesh’s slowdown in construction further compounds these challenges, leaving traders in a difficult position.
In contrast, Turkiye’s rising scrap prices highlight a more optimistic outlook driven by restocking efforts and potential market strength in the US. As the South Asian markets move through this period of uncertainty, stakeholders must closely monitor local and international developments to navigate the ongoing challenges effectively.
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