Bangladesh: Bulk ferrous scrap imports hit a 12-month low in Feb'24

Bangladesh, a major South Asian importer of bulk ferrous scrap, experienced a significant 16% m-o-m decline in imports of the same in February 2024. Volumes dropped to 174,428 tonnes (t) from 208,518 t in January, according to Customs data maintained with BigMint. The import volume in February 2024 remained at the same level as that in March 2023, marking a 12-month low. This downturn in bulk scrap imports from December 2023 marked the third consecutive decline. Despite this, y-o-y figures showed a remarkable 96% increase, rising from 89,075 t in February 2023.

This monthly decline was primarily attributed to delays in LC approvals, along with a weaker finished steel segment following the elections. Additionally, shipments from Australia and Indonesia decreased, while there was no volume from South Korea and Thailand.

According to market participants, prolonged inflation has eroded consumers' purchasing power, resulting in reduced infrastructure spending in the country, which in turn has led to lower scrap consumption.

Country-wise breakup

Imports from the US largely stable m-o-m: In February, the US, a major bulk scrap supplier to Bangladesh, witnessed a largely stable m-o-m export volume with a 1% drop to 61,958t in February from 62,469 t in January 2024.

Imports from Australia 56% down. Another prominent scrap supplier, Australia, recorded a major volume drop, which was 56% less m-o-m as compared to last month. Bangladesh imported 26,804 t of bulk ferrous scrap from Australia in February 2024 against 60,550 t in January.

Imports from Indonesia down: Bulk buyers from Bangladesh identified Indonesia, Hong Kong, and Malaysia as better alternative sources amid higher costs compared to the US and Japan. Yet, in February, imports from Indonesia registered a volume of 8,199 t, marking a 51% drop from 16,789 t in January amid low bulk scrap inquiries during February.

Price trends

BigMint's monthly average price assessment for US-origin bulk HMS (80:20) stood at $430.4/t CFR Chattogram in January as against $428.75/t CFR in December.

BigMint's monthly average price assessment for Japan-origin bulk H2 stood at $427.83/t CFR Chattogram in January, as against $419.5/t CFR in December.

Outlook

Currently, Bangladeshi buyers may be cautious due to high electricity costs and subdued demand for finished steel in the country. However, there is increasing optimism that steel mills will sustain a steady import volume, potentially leading to a stable trend in the near term.