SOUTH ASIA STEEL SCRAP: Prices jump on growing supply-demand gap

The price of shredded steel scrap imported into India and Pakistan jumped on Friday November 20, with available material in short supply and a strong Turkish market, sources told Fastmarkets.

Fastmarkets calculated the steel scrap, shredded, index, import, cfr Nhava Sheva, India, at $355.76 per tonne on Friday, up from $337.41 per tonne one week earlier.

A deal concluded earlier in the week saw shredded from the UK booked at $350 per tonne, while other deals were heard at $353, $355 and $360 per tonne toward the end of the week.

These compared with offers of $328-340 per tonne last week.

Material remained in short supply while demand continued to grow, which has caused tightness in the material for several weeks.

In addition to supply difficulties, logistics issues concerning rising container freight costs and container availability also supported the firm pricing.

“It’s very tough. Finding shipping containers is a [big] problem,” a trader said. “Some shipping lines don’t have empty containers and are canceling bookings, while everyone’s fighting for material. Some yards are canceling contracts while the market has gone up, which they never used to do.”

One buyer said that shredded prices into India were not workable because of the higher rates available in the nearby Pakistan market, and had not traded as a result.

“[Scrap] prices are increasing by the day. There are higher prices for semi-finished and finished steels. India has caught up in the past three weeks, [with] finished prices up by $60-70 per tonne. Sea freight increases added another $7-8 per tonne to the price,” a second trader said.

“Prices are sky rocketing. A jump of $15-20 per tonne in a day is astonishing,” a mill source said.

“It’s difficult to anticipate anything. All the [market factors] put together have played a major role, and there is globally good demand for finished steel. The supply-demand gap has increased. The lower availability of containers should ease but the shortage of material won’t ease [any time] soon. If the logistics issues can be resolved at least, there will be some stability,” the same source added.

“Shipping lines are only offering spot bookings instead of pre-booking, with prices changing by the hour for some companies,” a seller said. “People are scared of a sudden increase in scrap prices. It’s a scary time.”

A sharp rise in international scrap prices has also pushed up prices in key export markets.

Fastmarkets calculated the index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey, at $330.60 per tonne on November 20, up by more than $30 per tonne from $299.41 per tonne one week earlier.

And the weekly price assessment for steel scrap, HMS 1&2 (80:20 mix), import, cfr Nhava Sheva, India, was $330-345 per tonne on Friday, up from $305-320 per tonne.

Prices for HMS material from all origins moved up during the week, with UK-origin HMS making up the bottom end of the range, and Australia- and UAE-origin material at the top end.

Fastmarkets calculated the steel scrap shredded, index, import, cfr Port Qasim, Pakistan, at $355.30 per tonne on November 20, up from $341.90 per tonne on November 13.

Deals heard during the first half of the week saw shredded material booked at $350 and $352 per tonne, rising to $356-358 for four cargoes heard sold, before increasing further to $360 and $362 per tonne on the last day of the week.

These compared with deals heard last week at $338-343 per tonne.

“The market is affected by [much] less supply from the UAE, which I think is not even doing 50% of its usual exports. South Africa is not exporting, Kuwait is not exporting, and Brazil’s domestic [sector] is very strong. We are in a similar position to other countries,” a market source said.

“The increases in Turkey are influencing customers’ decisions, as well as scrap inventories being too short in Pakistan,” he added.

On the domestic market, rebar prices were reported to have increased by $12-16 per tonne, with producers looking to pass on the higher scrap costs.