SOUTH ASIA STEEL SCRAP: Prices surge on tight material supply

The price of shredded steel scrap imported into India and Pakistan moved up on Friday November 6 as a result of tight material supply, sources have told Fastmarkets.

Fastmarkets calculated the steel scrap, shredded, index, import, cfr Nhava Sheva, India, at $330.32 per tonne on Friday, up from $321.21 per tonne one week earlier.

A deal for shredded material was heard at $325-326 per tonne cfr, and another at $330 per tonne for 1,000 tonnes of UK-origin material. Offers were in the range of $322-335 per tonne, up from deals heard at $322-324 per tonne last week and offers in the same period as high as $325 per tonne.

One market participant said that higher Indian scrap prices this week were a result of prices in Turkey moving up and winter approaching, when scrap generation is lower.

Prices on the Turkish market, known for being the international trendsetter, moved up this week on strong bookings, with Fastmarkets calculating the index for steel scrap, HMS 1&2 (80:20 mix), North Europe origin, cfr Turkey, at $293.32 per tonne on November 6, up from $284.93 per tonne on October 30.

A shortage of available material also contributed to the firmness in prices.

“People are hesitant now. Prices are moving up on the basis of availability, and lockdowns in the UK and Germany. Prices are going up too quickly [and] my worry is [what happens] if they fall,” a trader said.

“The market is soaring,” a buyer said. “I don’t see the market going down this year. There is a huge shortage of containers and vessels. The logistics of goods is a much bigger a problem than availability of material. If lockdown continues in Europe, we will start to experience shortages of scrap also, and it will reflect in prices. We also have domestic sources of material such as scrap and [direct-reduced iron], but I am not sure about countries such as Pakistan.”

Fastmarkets’ weekly price assessment for steel scrap, HMS 1&2 (80:20 mix), import, cfr Nhava Sheva, India, was $300-315 per tonne on Friday, up from $280-295 per tonne one week earlier.

Offers of UK HMS made up the bottom end of the range, while offers of Dubai material were at the top end. This week, there was market chatter about Kuwait enforcing its scrap export ban more firmly, in addition to a similar ban in South Africa and in the UAE.

“There are limited offers of HMS,” a seller said. “There is a huge shortage of material. It’s not going to India, it’s going to Thailand, Vietnam, other Asian locations. There is not much available. Yards are either holding on to material or oversold. The price peak is now, and the [religious] festival season is coming, so the market might slow down. Scrap is like gold now.”

Fastmarkets calculated the steel scrap shredded, index, import, cfr Port Qasim, Pakistan, at $330.73 per tonne on November 6.

This week, deals for shredded were heard at $328 per tonne, $330 per tonne for 1,000 tonnes from the UK sold on Thursday, and another at $332 per tonne.

These were all up from a deal level of $322 per tonne for UK material last week, and other transactions heard at $319-325 per tonne.

“I got a better price on the Pakistan market so I sold nothing into India. The Pakistan finished steel market is $15-20 per tonne up,” a second trader said.

“There is more interest this week. There is tight supply in India and Pakistan, and everyone always watches what’s happening on the Turkish market,” a third trader said.

“I don’t know how to sustainable it is but Indian prices have jacked up a lot,” a fourth trader said. “There is uncertainty about what it might lead to, but local scrap is available, [and recently] the Pakistan market has been stronger than India’s.”

What to read next
Fastmarkets is launching a low-carbon primary aluminium differential, Japan, South Korea to complement its existing premiums in East Asia and to meet market interest in a low-carbon aluminium pricing mechanism.
Fastmarkets’ European green steel price was published earlier than scheduled due to an error.
Fastmarkets explores three innovative pathways paving the way for sustainable steel production in Asia amidst rising capacity and demand challenges, driving the urgent need for decarbonization and low-carbon supply chain development
This week marks two years since Russia invaded Ukraine on February 24, 2022, but despite the resulting threats and challenges thrown up by the war, the Ukrainian steelmaking sector has managed to adapt. Here, Fastmarkets recaps the key changes
Amid inflation and a global economic slowdown, BHP's outlook for the steel industry in China, the world's largest steel producer, has become less optimistic
Manganese, chrome, tungsten and vanadium will be key topics of discussion at Fastmarkets' upcoming Asia Ferroalloys Conference 2024 in Hong Kong on February 26-28, after appearing on China's latest list of critical minerals