Major Bangladesh-based mills continued to remain largely passive with imported scrap bookings for yet another week. In the absence of demand from the downstream sectors, steel producers with piled-up inventory desisted from purchases keeping market sentiments negative.
Recent bulk deals and offers
- In a recently-heard deal, a small bulk cargo from Singapore of around 8,500 t HMS 1&2 (80:20) was booked at $455/t CFR Chittagong.
- In another deal, a Venezuela-origin bulk cargo for HMS 1&2 (80:20) for around 15,000 t was heard booked at $450/t CFR. However, the deal remained unconfirmed till the time of publishing this assessment.
- Fresh offers for USA-origin bulk HMS 1&2 (80:20) are being offered at $440-450/t CFR Chittagong, moving down further by $10-20/t w-o-w.
- On the other hand, indications for bulk Japanese H2 scrap are at $475/t CFR levels, whereas buyers showed little interest for Japanese material. Buyers and steel mills are waiting for the Japanese Kanto scrap export tender scheduled for 9 September.
Interestingly, Bangladesh witnessed a significant recovery in scrap imports in August 2022 after shipments dropped last month. Imports rose 63% m-o-m in August to 315,521 t compared to 193,450 t in July.
Limited container scrap bookings
The imported containerised market remained inactive for yet another week. The secondary mills remain cautious about booking fresh material owing to subdued demand for finished steel, power outage, and LC restrictions.
- Fresh offers of UK-origin shredded were heard at $495-500/t CFR, down $5-10/t w-o-w. However, buyers showed little interest in booking any container at these levels.
- HMS 1&2 (80:20) is being offered at $460-470/t CFR levels. “Container bookings will not be feasible till the price level comes down to bulk,” said a source.
Rebar prices decline sharply
In the context of the recently released notice from the government’s tariff commission to some rebar manufacturers for price manipulation, mills are struggling with low margins from finished steel sales and hence buyers are in a wait-and-watch mode, expecting rebar prices to fall further, SteelMint learnt from sources.
Meanwhile, some mills are running on 50% capacity, while some mini-mills have suspended production.
- SteelMint’s assessment for domestic rebar prices stood at BDT 89,000/t ($937/t) exw-Chittagong, down BDT 2,500/t w-o-w.
- Secondary mills in Dhaka are quoting rebar at BDT 78,000-82,000/t ($820-862/t), down significantly by BDT 6,000- 8,000/t w-o-w.
Outlook: Imported scrap trade is likely to remain muted in the near term, however bulk buyers may maintain their buying momentum ahead of the upcoming winter season. The rebar market may continue to languish due to lack of support owing to liquidity issues arising from the currency fluctuation.
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