Bangladesh: Bulk ferrous scrap imports drop 8% m-o-m in January amid sluggish steel demand

Bangladesh, a major ferrous scrap importer in South Asia, saw a substantial 8% m-o-m decline in bulk scrap imports in January 2024, dropping to 208,518 t from 227,388 t in December, as per customs data from BigMint. This downturn followed a peak in bulk scrap imports in November 2023 and marked the second decline since August 2023. Despite the monthly decline, y-o-y figures showed a 12% increase, rising from 185,744 t in January 2023.

This monthly decline was primarily attributed to the ongoing election in January, followed by a weaker foreign exchange reserve. Furthermore, shipments from the US decreased with the absence of volume from Japan.

In January, Bangladesh's total ferrous scrap import volume reached 3,77,000 t, with around 55-60% in bulk (2,10,000 t) and the remainder in containers. The total volume dropped by 15% as compared to 441,816 t in December 2023.

Country-wise breakup

• Imports from the US down m-o-m: In January, the US, a key bulk scrap supplier to Bangladesh, faced a substantial 26% m-o-m decline in export volume, plummeting to 62,469 t in January from 84,519 t in December 2023. Additionally, weak demand in the finished steel market followed by persistent LC opening issues, contributed to the decline.
  
  
• Imports from Japan largely absent: Another prominent high-grade scrap supplier, Japan, also recorded no major volume as scrap exports to Bangladesh because of lesser involvement in major buying apart from the Kanto tender for January 2024. The increased demand from other buyers, like Vietnam and Taiwan, kept the market competitive for Bangladesh.
  
  
• Imports from Australia rise: Bulk buyers from Bangladesh identified Australia as a better alternative source amid higher costs compared to the US and Japan. Particularly in January, imports from Australia registered a volume of 60,550 t, marking a 123% surge from 27,194 t in December amid multiple bulk deals secured during December.
  
  
• Imports from New Zealand, South Korea, and Thailand resume: Bulk scrap imports from New Zealand and Thailand were resumed after a short absence in December 2023, contributing 68,710 t together as compared to nil volume last month.
  
  

Price trends

BigMint's monthly average price assessment for US-origin bulk HMS (80:20) stood at $428.75/t CFR Chattogram in December as against $406.29/t CFR in November.

BigMint's monthly average price assessment for Japan-origin bulk H2 stood at $419.5/t CFR Chattogram in December, as against $408.57/t CFR in November.

Outlook

Currently, Bangladeshi buyers are displaying heightened activity, supported by streamlined LC approval processes following the recent election, alongside improved demand in the finished steel market. There's growing optimism that steel mills will prioritise attaining a more consistent import volume, potentially leading to enhanced scrap trades in the near term.