Bangladesh Bulk Scrap Imports Up; Billet Imports Down in FY18 – Port Data

Rising steel capacities and increased dependence on secondary steel production have pulled bulk ferrous scrap imports up. On the other side, 20% regulatory duty imposed by the national government on overseas purchase of steel billets in addition to 15% VAT have moved down bulk billet imports significantly.

Bulk ferrous scrap imports up 47% Y-o-Y – As per ports data for bulk vessels, during FY’2018 (Jul’17-Jun’18) Bangladesh has witnessed sharp rise of 47% Y-o-Y in bulk scrap imports as against imports recorded in FY’17. The country imported 1,112,912 MT bulk ferrous scrap in FY18 against 757,364 MT in FY17.

Top exporters of ferrous scrap were USA, Japan, Netherland, UK and Australia to Bangladesh in FY18. Chittagong remained topmost unloading port for bulk imports again in FY18.

Bangladesh has estimated annual crude steel capacity of 3.5-4 MnT which is likely to increase further with rising steel capacities in FY19. While by year 2020, ferrous scrap imports are likely to cross 3 MnT and figures are expected to inflate to 5 MnT mark by 2022.

Bangladesh steel industry is dominated by 3-4 major steel mills along with several emerging small-scale steel producers. BSRM remained the largest ferrous scrap importer with share of around 65-70% in Bangladesh’s bulk scrap imports. BSRM has three scrap importing units as BSRM Steel Mills Ltd., BSRM Iron & Steel Co. Ltd. and Bangladesh Steel Rerolling Mill Ltd. While Abul Khair Steel Melting Ltd remained second largest bulk scrap importer in this year.

Bulk steel billet imports down 44% Y-o-Y – As per ports data for bulk vessels, during FY’18, Bangladesh has witnessed considerable fall of 44% Y-o-Y in bulk billet imports as against recorded in FY’17. The country imported 131,700 MT bulk billet in FY18 as against 236,950 MT in FY17. Bulk billet imports fell from almost 1 MnT in FY16 to just 0.1 MnT in FY18.

Since last year steel producers have struggled to bolster domestic billet production to meet the growing demand. To a great extent the country has attained virtual self-sufficiency in billet production however this has been achieved solely through the induction furnace route and with the use of imported scrap.

Fall in Billet imports supported the increase in shipments of Imported scrap and DRI which showed Y-o-Y increase of 47% & 35% respectively.

However, congestion on its sea port which remains overburden with bulk shipments of imported scrap, logistics issues, limited availability of high strength steel and heavy rains have continued to remain a matter of concern in the country. Presently there are a number of infrastructure projects underway in Bangladesh such as the Rampal Power Plant and Padma Bridge project which could require HSS grades steel which may further compel steel producers to procure imported materials.

Commodity wise Bangladesh bulk imports –

Qty in MT, Provisional Data
Source: SteelMInt Stats, Customs Data