The cyclical behavior of prices has been in motion this week and the subcontinent recycling market is slightly descending weighed down by the sliding Iron ore prices. Bangladesh and Pakistan have witnessed considerable fall in offer prices whereas end buyers from India have maintained stable offer prices. In terms of wider Macroeconomic outlook, the steel demand is stable throughout the globe, but currently the market sentiments seem to be reacting in panic mode due to the steep fall in iron ore prices.
Commodity markets suffered a violent sell-off as mounting anxiety about slower economic growth sent oil and metal prices tumbling in global market.
Oil prices continued their fall this week weighed down by a weak demand scenario in Asia. Investors are worried that oil prices went too high during its rallying phase when optimism was sky-high about demand returning to normal whereas demand remains softer than expected.
The rising Delta variant cases have created uneasiness in Global markets as more and more countries have been widening their travel restrictions and going into partial and complete lockdown bringing a fear in the market that the economy can take more than expected time to recover.
The demand outlook from India has been stable this week with competitive offers coming from end buyers for all available units. There has been no drop in offering prices as the demand for ship plates is steady in Alang.
After a long period of back-and-forth discussions, the transportation strike in Alang with demands to increase truck fares and abolish loading charges has been called off as the association has now agreed to strike off the loading charges which were previously levied due to worker’s shortage during lockdown.
The Bangladesh recycling market seems to have been highly impacted by the current global market sentiments as the offer prices from end buyers have considerably reduced this week.
The domestic steel mills are showing less buying interest which is causing a gloomy outlook among recycling yards regarding the demand prospects of steel.
Imported scrap market has witnessed less trade deals as many market players were absent on account of the Muharram Ashura holiday this week.
The end buyers from Gadani are reeling under dual pressure of newly changed taxation rules and the weak global market sentiments. This has led to a fall in offer prices by about USD 25/MT.
In this uncertain phase, the end buyers are preferring small and mid-sized tonnage as they do not want to commit to a bigger investment at the moment.
A delegation of Steel associations is meeting with the Taxation authorities next week which may bring some clarity and resolve their issues. We will keep you updated with the outcome of the meeting as and when it takes place.
One rig and two small reefers have arrived in Aliaga this week.
Imported scrap prices have softened further by about USD 5/MT and the domestic prices are witnessing a drop of about USD 10/MT.
Turkish Lira has gained some strength this week and remained stable. It is currently being traded at TL 8.54/USD.
Daily Covid cases in Turkey are still at 20,000 level which has made the Government to enlarge the scope of vaccination. Currently all people aged 15 and above are eligible to get vaccinated.