Bangladesh: Imported scrap trade remains slow as rains weigh on rebar demand

Bangladesh’s imported scrap market remained slow this week, despite prices continuing to dip.

Meanwhile, a few major mills already secured inventory last week through bulk bookings from the US, and are yet to make a fresh round of purchases. Rains in most parts of Bangladesh have slowed down consumption from end-users.

US-origin bulk HMS 1&2 (80:20) offers have come down to $465/t CFR Chittagong levels, down by $20/t CFR w-o-w. However, no major bulk booking was reported this week. A few buyers indicated that bulk offers from the EU were hovering at $445/t CFR for HMS but no bookings were heard.

Furthermore, another major bulk cargo supplier –Japan — is yet to quote any bulk offers to Bangladesh. A total of 5,500 tonnes (t) of Japanese H2 scrap have been awarded at an average price of JPY 53,560/t ($399/t) FAS, in Japan’s monthly Kanto Tetsugen ferrous scrap export tender, which concluded last weekend. A Vietnam-based buyer may have won the tender, sources said.

Trade in containers remains active

In contrast, the containerized scrap market saw active procurment of material at lower offers last weekend. Buyers are now ruling the market and they believe suppliers are ready to sell material at their bid prices. But now, due to slow finished steel consumption, buyers are cautious of booking fresh material amid the inventory already procured.

• SteelMint’s assessment of UK-origin shredded in containers is now at $525/t CFR levels, down by $25/t w-o-w.
• Around 1,000 t of EU-origin shredded has been sold recently at $530/t CFR levels.
• HMS offers from the UK are, however, now at $510/t CFR levels.

Market overview

•  BDT dips against dollar: Bangladesh’s currency taka has depreciated further against the dollar, hitting 92.50 on the currency exchange platform recently.
• Rebar offers unchanged w-o-w: Domestic rebar prices remained mostly down by BDT 1,500/t w-o-w due to limited demand from end-users. As per SteelMint’s assessment, the major mills’ rebar (10-16mm) price assessment stood at BDT 84,000/t ($904/t) exw-Chittagong, including taxes.
• VAT impact awaited: Manufacturers will now be required to pay a VAT of BDT 1,200/t from the next fiscal year against BDT 1,000 in the outgoing fiscal for making steel products from billets. This is yet to have an impact as mills have not raised rebar offers yet.

Outlook: Mills are likely to book bulk cargoes in the coming weeks amidst steep drop in offers and in Turkey’s prices.