Bangladesh: Imported scrap market passive on LC issues, bearish market sentiments

The imported scrap market in Bangladesh endured passive for the fifth consecutive week. The steelmakers are facing problems to maintain production activities and cash flow. Bearish domestic market activities, LC issue and low consumption of finished steel due to the cash crunch remained the major factor of the slow market.

The global economic crisis has also impacted Bangladesh. The country may fall into a deep economic crisis. Both large and small industries have been hit by the acute gas crisis and recurrent load shedding, with production falling while costs have shot up, SteelMint learnt.

Bulk scrap offers rangebound, no firm bids heard

Indicative offers for US-origin bulk HMS (80:20) were heard at $390/t CFR, unchanged w-o-w. Buyers’ bids stood at around $370/t. However, buyers are still showing interest in US material but no fresh deals were heard.

Meanwhile, no firm indication was heard for Japanese material. Japan’s scrap export price driver, the monthly Kanto Tetsugen ferrous scrap export tender, was conducted today for November. Lower bids from participants resulted in the tender remaining inconclusive for the second time this year after May.

Last month, around 10,000 t of scrap was awarded and the average price for H2 scrap stood at around JPY 49,865/t ($341/t) FAS. Prices fell by JPY 1,175/t ($8/t) from JPY 51,040/t ($357/t) in September.

Containerised scrap offers fall

• New offers for UK-origin shredded are at $450/t CFR, down $10/t w-o-w.
• Meanwhile, UK-origin HMS is now heard at $420/t CFR Chittagong, down $10/t w-o-w.

Furthermore, major mills usually procure scrap inventory for at least 3-4 months. Hence, they are still sourcing the domestic material as banks are not ready to entertain the new LC for imported material. However, domestic shipbreaking scrap prices continued to move up w-o-w basis on supply shortage.

Currently, the domestic shipbreaking scrap is being traded at BDT 57,000/t exy basis.

Meanwhile, due to electricity problems, most Dhaka mills shut down their plants, sources informed SteelMint.

Rebar prices firm: SteelMint assessed domestic rebar prices at BDT 88,000-89,000/t ($834-874/t) exw-Chittagong. The secondary mills in Dhaka are quoting rebar at BDT 82,000-84,000/t ($776-795/t), up by BDT 3,000/t w-o-w. However, major construction activities are yet to pick up except for governmental projects.