Bangladesh: Mills lift rebar offers on improved restocking, power curbs

Bangladesh-based mills lifted rebar offers further by around BDT 2,000/t ($20/t) w-o-w on improved restocking by distributors in anticipation of a further hike in the near term on power outages.

1. SteelMint’s assessment for domestic rebar prices stood at BDT 90,000-92,000/t ($947-967/t) exw-Chittagong levels, up BDT 1,500/t ($16) w-o-w.
2. Secondary mills in the Dhaka region are quoting rebar at BDT 88,000/t ($925/t), up by BDT 3,000/t ($30) w-o-w.

Industrial production has slowed down in the country, while some mills have either suspended or cut their steel production for the time being due to power outages. According to sources, the government is struggling to meet the cost of production due to the increase in the prices of fuel in the world market amid the ongoing Russia-Ukraine conflict.

Bulk imported scrap offers surge further – Despite the limited demand major mills are trying to keep their inventory replenished ahead of seasonal demand in winter. Bulk buyers continued trade activities at a slow pace. However, only a couple of buyers are active in the market.

1. Indicative offers for bulk US HMS cargo are heard at $455-460/t CFR levels. However, no fresh deal was heard to have been booked. Prices have moved up by $15-20/t w-o-w. Around 30,000 t of US-origin mixed (HMS and shredded) bulk cargo has been booked for September 2022 shipment last weekend at an average price of $445-450/t CFR Chittagong.
2. In contrast, indicative Japanese bulk H2 offers are at $405-420/t CFR levels.

Market overview

• BDT mostly stable w-o-w: The national currency, Taka, is mostly stable on a weekly basis and trading at 94.8 levels. Market participants believe that buyers will be back in the market if the exchange rate becomes stable.

• Container scrap market extends silence: A few Dhaka-based mills have decided to cut their steel production, while some mills have already closed owing to high input costs. Due to the currency depreciation, raw materials cost have increased by almost 20%, while there has also been a hike in transportation costs. Thus, mills opted to wait and watch for clear market directions.

1. Fresh offers of UK-origin shredded are being heard at $515-520/t CFR levels, moving up sharply by $25-30/t w-o-w.
2. SteelMint’s assessment for UK-origin HMS (80:20) stands at $470/t CFR, moving up significantly by $10/t w-o-w.

Outlook: Despite the continue uptrend in domestic and imported prices, industry participants feel the market may pick up next month as the season will start changing and the approaching winter will be considered as a favourable month for construction activities.