Bangladesh steel mills resume bulk scrap bookings; prices fall

Bangladesh based steel mills have resumed their bulk scrap bookings after remaining silent for about a week’s time. In a recent deal concluded, 15,000 t Japanese H2 bulk cargo has been booked at $ 307-310/t CFR Chittagong basis. Prices have fallen by $5-10 w-o-w, as per SteelMint’s analysis.

There were few market indications of a USWC origin bulk cargo of shredded being booked at $325/t CFR level, but suppliers did not confirm the deal till the time of publishing this report.

“Bangladesh buyers’ expectations are not workable for US suppliers” shared a USA based scrap trader. Due to higher domestic prices in the USA, imported scrap offers may remain at the higher side, SteelMint learnt.

Containerized scrap prices fall marginally – SteelMint’s assessment of containerized shredded 211 scrap from UK/Europe origins stands at $320-325/t CFR Chittagong, down by $2-3 w-o-w.

• Few deals have concluded in containers, in which Brazilian bundles have been sold at $270/t, while PNS has booked at $320/t CFR Chittagong basis.
• In another deal, 2000 of Chile/Australia origin HMS 1&2 (80:20) was sold at $305/t CFR Chittagong level.
• HMS 1 from Brazil is being traded at $310/t CFR Chittagong basis.

Domestic steel market sentiments remain bearish – Domestic finished steel prices continued to fall, however, demand has improved slightly as compared to last month. Market insiders expect that it would start to pick-up from October as from the next few months, considering winter season is a favourable time for construction activities.

• Local scrap yard price stands at BDT 30,500/t ex yard basis.
• Billet price currently traded at BDT 40,600-41,000/t levels.

According to some recent media reports, the secretary general of the Bangladesh Steel Manufacturers’ Association, stated Bangladesh has about 40 active factories, which have a combined capacity to produce 9 mn t of steel annually. As much as 90% of the raw materials used by the sector is imported scrap. Most of the steelmakers are running below 50% capacity and selling 60-grade mild steel (MS), commonly used in construction. The maximum government’s infrastructure projects account for 35 to 40 % of the total steel consumption, which has been reduced now due to the global pandemic.