Bangladesh: Bulk ferrous scrap imports largely stable in Jan’21 on active restocking

Bangladesh, an emerging steel market and one of the growing importers of ferrous scrap in Asia, recorded stability in bulk imports and stood at 0.28 mn t in Jan’21 as against 0.3 mn t a month ago, as per vessel line up data recorded with SteelMint.

Out of  12 bulk vessels that arrived in Jan’21, The USA, was the biggest supplier and exported four vessels, carrying 0.13 mn t in Jan’21. Japan remained the second largest source for Bangladesh scrap imports and exported five vessels with 0.08 mn t of scrap, followed by UK and New Zealand at 0.04 and 0.02 mn t respectively.

On y-o-y basis, bulk scrap imports have climbed by 211% from 0.09 mn t in Jan’20 to 0.28 mn t in Jan’21.

Market highlights –

• Mills remained active in restocking scrap ahead of winters in order to keep their steel production ongoing, resulted in a significant drop in scrap imports
• Japanese bulk scrap offers for Bangladesh have continued to strengthen on strong domestic demand and tight availability. SteelMint’s assessment for bulk Japanese monthly average bulk H2 scrap price has increased by $40/t m-o-m basis to $440/t, CFR Bangladesh in Dec’20, as per data maintained with SteelMint
• In Jan’21, Bangladesh mills remained on wait & watch approach for a couple of weeks before placing any new order for bulk scrap considering volatility in offers. However, as per our records, 0.22 mn t of confirmed bulk bookings were made in Jan’21 from Japan, US and Australia.
• Bangladesh based buyers may get impacted by China’s comeback into the imported scrap market. They are apprehensive that this would result in scrap prices rising to a higher level. Due to China’s proximity to Japan, buyers from Bangladesh may find it hard to book bulk cargoes at desired rates

Steel expansion plans to boost scrap imports – BSRM’s board had approved investment of BDT 700 crore to raise the capacity by another 0.5 mn t pa. The new plant is expected to start its operations by mid-2023. The ramp up of steel output at other key mills is likely to raise ferrous scrap imports further in the coming years.

Italian equipment supplier – Danieli has received an order for supply of a MIDA endless-casting rolling mini mill by a Bangladeshi private steel producer, Bashundhara Group. This mini mill is to be installed at Bashundhara industrial park in Mirsarai, near Chittagong and will have a capacity to produce over 1 mn t p.a. of rebar and wire-rod.