Bangladesh: Bulk ferrous scrap imports jumps over two-fold in Mar’22

Bangladesh, a major South Asian ferrous scrap buyer, recorded total imports of the material at 0.64 million tonnes (mnt) in Mar’22. The country imported 0.41 mnt of bulk scrap in Mar’22 against 0.19 mnt a month ago, showing an exceptional hike of 116% m-o-m, as per vessel line-up data maintained with SteelMint.

The country’s bulk imports significantly rose by 156% on a yearly basis from 0.16 mnt in the same period last year. A noticeable shift towards bulk ferrous scrap procurement was observed over containerised shipments.

Imports from USA, UK rise

USA continued to be the largest scrap exporter to Bangladesh at 0.15 mnt in Mar’22, up 150% as compared to 0.06 mnt in Feb’22. Bookings continued to take place on the back of supportive finished steel prices and increased demand from the construction sector.

In Mar’22, Bangladesh-based mills actively booked EU-origin cargoes to replenish stock amid supportive prices. Import volumes from the UK were seen at 0.13 mnt in Mar’22 against 0.04 mnt in Feb’22. Mills shifted to EU and US-origin cargoes over Japan amidst improved availability and cost effectiveness.

Why is Bangladesh shifting more towards bulk purchasing?

• Raw material security: Leading Bangladeshi steel mills have increased their capacities lately and scaled up imports of bulk cargoes as the quality of scrap being exported in bulk is reliable. There is a certain uncertainty associated with containers as deals are sometimes closed on the high seas.
• Container shortage: The container problem has not yet been fully resolved. The shortage is extending the time of containers and delivery is taking place after 2-3 months. On the other hand, bulk cargoes arrive within 35-40 days. Under Covid protocols, containers also require more time to unload compared to bulk cargoes. The longer turn-around is leading to higher freights for containers.

Outlook
It is expected that Bangladesh’s ferrous scrap imports might remain lower in April due to lesser bookings made owing to high offers from major suppliers, thus, resulting in need-based procurement. Similarly, the ongoing Russia-Ukraine trade tension can disrupt the market further. Imports from Japan would remain lull due to higher freight rates and bid-offers discrepancies.