Liquidity issues weigh on Bangladesh steel market sentiments

Bangladesh’s steel market has observed bearish sentiments amidst lower finished steel offtake on liquidity issues and lower bids from end users. Imported scrap trade in containers has remained limited. However, two bulk bookings were concluded by a steel mill towards the end of last week on winter restocking needs.

Bulk scrap bookings 

Bulk ferrous scrap import prices into Bangladesh have declined in a couple of deals concluded recently for Feb’22 shipments. Prices have corrected by $15-20/t w-o-w.

• A 30,000 t US-origin bulk cargo comprising shredded and bonus material was booked at an average price of $530/t CFR Chittagong.
• In another deal, 30,000 t of HMS in containers from the EU was booked at $530/t CFR Chittagong
• Japanese bulk H2 price indications moved down further to $545/t CFR Chittagong levels, down by $5-10/t w-o-w. However, no deals were reported from Japan as suppliers enjoyed selling in the local market amid higher price realization.

Containerised scrap market quiet

Market activities have slowed down during the year-end. Mills are under pressure due to liquidity issues and difficulties in loan disbursements from banks. Hence buyers are holding back and have opted to wait and watch, SteelMint understands.

• Shredded scrap from the UK/EU is being offered at $560/t CFR levels, unchanged w-o-w.
• Offers for UK-origin HMS 1 & 2 (80:20) are now available at $520/t CFR Chittagong levels, down by $5/t w-o-w

Market movers

• Market awaits active return of Turkish mills for price clarity: Global scrap imports leader, Turkey, witnessed limited deals in the last couple of weeks. In a recent deal a US-origin bulk cargo of mixed grades comprising HMS 1&2 (95:5) was booked at $476/t CFR Turkey basis, and shredded and PNS material at $486/t CFR Turkey, by an Aegean region steel mill, SteelMint learnt from sources. In another deal heard, a US-origin cargo containing HMS (95:5) was booked by an East-Marmara steel mill at $482/t CFR Turkey. Hence the Bangladeshi scrap buyers are waiting for a clear market direction before placing fresh slots.
• Lira recovers against the dollar: The Turkish national currency, Lira, after hitting lows of 18 has recently seen some recovery and is being traded at 12.53 against the dollar. This is another factor which is likely to govern the global seaborne scrap market.
• Lower bids keep Bangladesh rebar sales under pressure: Bangladesh-based steel mills are holding their rebar prices at BDT 76,000-78,000/t exw Chittagong. Mills had booked scrap earlier at higher prices; hence the steel mills are less interested to lower their rebar offers but the bids from the end-users for rebar are comparatively low which has kept trade low. Dhaka-based mills are offering rebar at BDT 70,000-71,000/t ($816-827/t) on an exy-basis, unchanged w-o-w.
  

Outlook

Considering the time of the year, few market activities are expected in the imported scrap market. Hence, Jan’22 bookings might resume soon, while in the next few weeks Turkey will resume bookings again – maybe at low levels.