Bangladesh: Scrap imports likely to gather pace as domestic steel market recovers

Bangladesh’s imported scrap market happens to be exhibiting mixed trends as bulk bookings continue to trickle into the country. The major mills continued bulk cargo bookings at higher prices, whereas containerised buyers remained sidelined. The finished steel market is showing signs of recovery as prices have gone up slightly w-o-w.  

Imported scrap movement is not up to the mark, and offers remain high despite the absence of buyers.    

The market sentiment remained dull for the last couple of months owing to limited finished steel demand, LC restrictions and power cuts. Banks are also not allowed to open new LCs due to credit issues. Many mills are still grappling with production cuts to maintain cash flow and mini-mills are struggling to sustain themselves in the market. 

Bulk scrap offers and deals

• One more bulk deal from the US West Coast was heard concluded towards the end of last week for around 15,000 t each of shredded traded at $420/t and HMS at $415/t CFR Bangladesh. 
• Indications for bulk US-origin HMS are at $430/t CFR levels; however suppliers are holding offers for a while and may quote fresh offers at increased levels, SteelMint learned from sources.
• Indicative offers for bulk Japanese H2 scrap were heard at $410/t CFR. “Japanese scrap prices are likely to move up further after today’s Kanto scrap export tender as prices still on the higher side,” said a Japanese scrap trader. 
• SteelMint’s assessment for Japanese H2 are at $415/t CFR Chittagong.

Japan’s Kanto tender bid prices dip $8/t m-o-m: Japan’s monthly Kanto scrap export tender for October concluded today. A total of 10,000 t of scrap was awarded, with the average price for H2 scrap at around JPY 49,865/t ($340/t) FAS, SteelMint learnt from sources. Prices fell by JPY 1,175/t ($8/t) from JPY 51,040/t ($349/t) bids fetched in the September tender.

Scrap imports over 4 mnt in January-September: Imported scrap volumes into Bangladesh, a major ferrous scrap buyer in South Asia, reached 4.13 million tonnes (mnt) in the first nine months of CY’22 vis-a-vis 3.15 mnt in the same period last year. Total imports of scrap rose 31% on a yearly basis.

Containerised scrap offers and deals

• Around 1,000-2,000 t of UK-origin shredded was sold at $480-490/t, with prices moving up by $10-20/t w-o-w.
• In another deal, around 1,000 t of UK-origin HMS 1 (80:20) was booked at $470/t CFR, with prices increasing by $20/t w-o-w. 
• Around 1,000 t of UK-origin PNS was sold at $495/t CFR Chittagong.

Domestic rebar prices recover

Bangladesh’s rebar market improved this week as mills increased prices on improved demand from end-users. Prices increased after a continuous decline over the last one month. 

• SteelMint assessed domestic rebar prices at BDT 88,000-89,000/t ($867-876/t) exw-Chittagong, up BDT 500/t w-o-w.
• The secondary mills in Dhaka are quoting rebar at BDT 80,000-82,000/t ($787-806/t), up over BDT 3,000/t w-o-w.

 Outlook: Imported scrap trades are likely to pick up in the near term as the domestic finished steel market shows signs of further recovery.