The imported scrap market was largely quiet over the last few days amid tight liquidity issues even as mills are running out of adequate scrap stocks along side limited demand for finished steel.
Overseas bulk offers exist but buyers are resisting these amid the current market scenario. Mills are taking each step with caution in concluding deals of any substantial quantity, informed one of the well-known end-users based out of Chattogram.
Small and medium-scale steel mills based in Dhaka, usually dependent on imported material, are not in a position to resume production amid a lack of raw material availability, informed one steel mill from Dhaka.
The lack of imports has pushed local scrap prices higher as most of the domestic scrap traders are redeeming their stock levels, said a scrap trader from the ship recycling industry.
- Fresh offers for US-origin bulk HMS are heard at $445-450/t, and CFR Chattogram is lower by $5/t.
- Bulk Japanese H2 indicative levels were at $455/t, up bu $5/t w-o-w. Japanese suppliers prefer to trade with South Korea and other far-eastern Asian countries rather than Bangladesh.
As the nation has limited foreign reserves, central banks have restricted LCs to only essential items. People are getting LCs for previously booked cargoes, but are struggling due to the increased cost of production, SteelMint understands.
Containers market muted
The containers market in Bangladesh has been largely quiet throughout the month. Markets are witnessing negative sentiments on the back of limited trading activities because of the LC opening issue.
Furthermore, a few mini-mills in Dhaka have already closed due to lack of liquidity, making it difficult for them to stay in business. Additionally, subdued demand for finished steel has also kept steel mills under pressure.
Fresh containerised offers for UK-origin shredded scrap are at $465-470/t CFR, unchanged w-o-w.
“Proposals for opening of fresh LCs are not being entertained for the time being. Even the payments have been blocked by the bank to create unnecessary delay,” said a Dhaka-based steel producer.
Domestic market yet to pick up
The domestic market has yet to pick up, and steel producers have increased rebar prices to BDT 93,000-95,000/t ($896-915/t) exw, moving up by BDT 2,500-3,000/t.
SteelMint assessed domestic rebar prices at BDT 93,000-94,000/t ($896-905/t) exw-Chattogram. Dhaka-based mills have kept their rebar offers unchanged for the seventh consecutive week at BDT 87,000-89,000/t ($838-857/t). Prices have moved up sharply by BDT 3,000/t w-o-w.
Currently, local scrap is being traded at BDT 65,000/t ($626/t) ex-yard, up by BDT 1,000/t w-o-w.
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