Bangladesh’s imported scrap market continues to reel under pressure. Currency depreciation, power cost-push, LC-related issues and weak steel demand have continued to keep buyers less active in the imported scrap market.
While bulk bookings from Bangladesh have increased amid the drop in offers, the container trade is down.
Confirmed deals: A total of 15,000 t of H2 material has been booked at JPY 42,071/t (312/t) FAS basis in today’s Kanto tender. This is the second bulk cargo booking from the Kanto tender since July, as buyers are showing consistent interest in buying bulk material. Apart from this, an unconfirmed deal from USWC was heard to have been concluded at $425/t, CFR levels towards the closing of last week.
Indicative offers for bulk Japanese H2 material are at $420/t CFR levels. On the other hand, US-origin bulk offers for HMS 1&2 (80:20) are being quoted at $430/t CFR Chittagong levels. “Bulk suppliers moved to active Turkish bulk bookings for better prices”, said a major bulk buyer.
Imported scrap prices moved up sharply in recently-concluded deals. A Finland-origin cargo containing HMS 1&2 (80:20) was booked by a West Marmara-based steel mill at $390/t CFR Turkiye. In another deal, the US-origin cargo, comprising HMS (80:20), was booked at $394/t CFR Turkiye, by an Aegean region-based steel mill. SteelMint’s assessment for US-origin bulk HMS 1&2 (80:20) stands at $392/t CFR, Turkiye.
Container market struggles amid negative fundamentals
Containerised scrap buyers or secondary mills in Dhaka struggled amid negative market sentiments. The recent increase in input costs amid volatile currency exchange rates, increased raw material price, load shedding due to limited availability of LNG and LPG gas, high maintenance costs and heavy monsoon led to shutdown and production cuts at many mills.
Major mills were also facing power outage issues and decided to cut production for the time being.
The Bangladeshi taka (BDT) continued its slide against the US dollar, hitting an all-time low of 94.8 in the currency exchange market.
“Buyers need to pay extra BDT to settle the LCs as compared to the usual price. Hence, people may have to wait for some time before the market stabilizes,” said a prominent scrap trader. However, limited deals have been heard at increased prices.
- Fresh offers of UK-origin shredded are being heard at $490-495/t CFR levels, up by $5/t w-o-w.
- SteelMint’s assessment for UK-origin HMS (80:20) stands at $460/t CFR, up by $5/t w-o-w.
Mills lift rebar offers
Increased production costs and lower margins from finished steel sales kept market activities slow, SteelMint understands. However, mills have increased rebar prices by around BDT 5,000/t w-o-w.
- SteelMint’s assessment for domestic rebar prices remained unchanged at BDT 89,000-90,000/t ($937-947/t) exw-Chittagong levels.
- Secondary mills in Dhaka region are quoting rebar at BDT 85,000/t ($895/t).
The supply crunch in domestic scrap pushed prices up. However, tradable levels remained at BDT 60,000-61,000/t exy basis. Local scrap traders are holding on to the material as prices are increasing d-o-d, so that they can earn more profit, SteelMint learnt.
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