Asian Scrap Market Stalls Amid US–Iran Geopolitical Tensions

Asian Scrap Market Stalls Amid Geopolitical Tensions

The Asian scrap market faces a slowdown due to escalating US–Iran conflict. Buyers and sellers are cautious amid rising costs and uncertainty.

Spot trading activity in Asia decreased this week as steelmakers assessed the conflict’s impact on raw materials and finished steel sales. Many participants paused trading due to tight vessel availability, rising freight costs, volatile exchange rates, and unclear steel price trends.

Japanese scrap sellers increased domestic collection prices to retain material locally. Tokyo Steel raised prices by $12.70–15.80/t between 19 February and 3 March. Higher domestic demand limits scrap exports, challenging international trade negotiations.

Supply Pressures and Rising Prices in Asian Scrap Markets

The Asian scrap market faces additional pressure from supply disruptions and freight rate increases.

Shipowners may raise rates further if fuel prices climb. Containerized HMS 1/2 80:20 scrap in Taiwan rose to $330/t, up roughly $10/t from late February. Rising prices reflect limited supply and regional demand shifts.

South Asian buyers, including India and Pakistan, may seek Japanese scrap if Middle East shipments slow. Pakistan imported 1.23 million t of scrap from the UAE in 2025, while India imported 510,000 t. Disruptions around the Strait of Hormuz could intensify sourcing competition.

Weaker Steel Demand Could Damp Scrap Markets

Steelmakers worry elevated scrap prices may not translate to higher steel prices. Weak demand in the Middle East and potential oversupply in Asia could pressure margins.

If the US–Iran conflict persists, higher crude oil prices could spur inflation expectations and growth risks. March–May, the peak construction season in Southeast Asia, may see uneven steel procurement and pricing volatility.

SuperMetalPrice Commentary:

Asian scrap markets are caught between geopolitical tension and regional demand shifts. Freight costs, supply constraints, and domestic pricing pressures limit trade flows. If Middle East disruptions persist, South Asian and Asian buyers may increasingly compete for Japanese scrap, potentially driving regional price volatility. Traders should monitor vessel availability and crude oil trends closely to anticipate market movements.