Bangladesh: Bulk ferrous scrap imports continue to witness uptrend in CY’21

Bulk ferrous scrap imports into Bangladesh, which is a major scrap buyer in South Asia, continued to witness an uptrend in CY’21, as per vessel line-up data maintained with SteelMint.

The country imported 2.43 million tonnes (mn t) of scrap via the bulk route in CY’21 as against 2.35 mn t in CY’20 (Jan-Dec’20).

Imports drop from Japan, rise from the EU

The US continued to be the largest scrap exporter to Bangladesh at 1.35 mn t in Jan-Dec’21, up 7% as compared to 1.26 mn t in Jan-Dec’20, followed by Japan and New Zealand at 0.38 mn t and 0.18 mn t, respectively.

Imports from Japan plunged 54% to 0.38 mn t in Jan-Dec’21 as against 0.82 mn t in the same period the previous year. Bangladesh buyers held back from importing Japanese scrap in CY’21 as suppliers had to cater to the domestic market due to strong demand and better prices alongside discrepancies in bids and offers in the export market.

High offers forced buyers to prefer materials from other origins. For instance, Bangladesh-based mills actively booked EU-origin cargoes on price competitiveness.

Notably, bulk imports from the UK were recorded at 0.18 mn t in Jan-Dec’21 which were nil in the previous year.

Why have imports risen?

The country being majorly dependant on scrap, mills increased scrap imports to match up with steel-making needs.

Bangladesh’s steel market has picked up pace after the mills resumed operations following after the lifting of lockdown restrictions which had lasted for more than a month in the mid-year period. The shutdown of manufacturing plants was finally lifted on 10 Aug.

With the resumption of market activities, inquiries for bulk scrap cargoes rose.

For instance, after facing a delay of one and a half years, commercial production at the quantum EAF plant of Chattogram-based GPH Ispat began in Jun’21. The plant has an annual melting capacity of around 170,000 mt/year.

Outlook

It is expected that Bangladesh’s ferrous scrap import market may witness more improvement owing to a resumption of construction activities.

Scrap bookings from the UK and EU are likely to pick up due to the limited availability of the material in other regions and high offer prices from major exporting countries such as Japan.

Bangladesh has a growing need for raw materials and steel-making technologies. With key infrastructure projects like the Padma bridge and Payra seaport, Bangladesh’s steel consumption is anticipated to increase in the coming years which may keep demand for scrap strong.