Indian scrap market remains at standstill
India's imported ferrous scrap market remained largely inactive last week despite expectations that freight costs could ease following reduced geopolitical tensions in the Middle East, market participants tell Kallanish.
"Indian prices are so low and demand is so weak that there is almost no appetite for imported scrap," a leading international trader says.
Market participants note that Indian buyers' bid levels remain well below suppliers' expectations, preventing new deals from taking place. Hand-loaded HMS import bids are currently heard at around $345/tonne cfr India, while EU-origin shredded scrap bids are heard at $360-365/t cfr Nhava Sheva.
However, suppliers are seeking more than $390/t for shredded scrap, leaving a wide gap between bids and offers.
Supplies from East Asia also remain limited. Japanese exporters continue to focus on domestic sales and shipments to South Korea, while high freight costs have reduced the competitiveness of Hong Kong-origin material into India.
The situation is similar across neighbouring countries. Buyers in Pakistan are bidding around $405/t for EU origin shredded scrap, down from previous levels, but suppliers have yet to accept the lower prices. Bangladesh is also seeing a gap of around $10-15/t between buyers and sellers with Brazil origin HMS offers around $390-400/t cfr Chattogram basis.
Despite weaker finished steel prices in Türkiye, exporters continue to prioritise shipments to the country over India because achievable prices remain higher.
"Türkiye is still a better market than India. That's why suppliers are not ready to reduce offers to Indian levels," the trader says.
While the reopening of the Strait of Hormuz could eventually lower freight rates, buyers say the main obstacle is weak domestic steel demand rather than logistics costs.
Market participants add that freight rates have not increased uniformly across global trade routes. Freight from Europe and the UK remains elevated, with another container freight increase announced for July. In contrast, African and Latin American routes have experienced much sharper increases in recent months.
The weak demand outlook is expected to persist through the monsoon season. Market participants believe steel demand is unlikely to improve materially before September, following the seasonal pattern seen in previous years.
As a result, most buyers are limiting purchases to immediate requirements rather than rebuilding inventories.
From: Kallanish
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