Bangladesh: Bulk ferrous scrap imports up by 14% m-o-m in Jul'24 amid rising container freight rates

Bangladesh, a prominent importer of bulk scrap in South Asia, experienced an increase in its bulk ferrous scrap imports during July 2024. The country brought in a total of 396,639 tonnes (t), with an increase of 14% from the previous month's 347,268 t. This rise also reflects an 8% y-o-y increase compared to July 2023's import volume of 367,769 t.

Factors behind a rise in bulk scrap imports

• Increased bulk inquiries as compared to containers due to rising freight rates. Inquiries for bulks from the Netherlands, Indonesia, and Japan along with New Zealand increased in June, which helped July bulk scrap bookings on the higher side.
  
  
• Larger mills in Chattogram favoured bulk shipments over containers for restocking for future production cycles, as they had a better chance of securing Letters of Credit (LC).
  
  

The market saw increased activity before the monsoon intensified, particularly with heightened interest in bulk scrap as buyer-seller price expectations converged from the Oceania, Far East, and South East regions.

Country-wise breakup:

Imports from Japan double: Bangladeshi importers procured approximately 84,772 t of ferrous scrap from Japan in July, reflecting a notable surge of 145% compared to the 34,590 t imported in June.

Imports from New Zealand resume: In July, scrap imports from New Zealand totalled 48,315 t, which resumed after a halt in imports in June. On a y-o-y basis, the import volume rose by 66% as compared to July 2023's 29,075 t.

Imports from the US decline: July saw a significant decline in bulk scrap imports from the US, declining by nearly 40% to 125,653 t from June's 206,806 t. Compared to the same period last year, imports dropped by 21% from 159,233 t. The decline can be attributed to busier US suppliers to Turkiye coupled with limited inquiries for US-origin bulk scrap which were largely stable in the last two months.

According to buyer sources, vessels booked from the US in May have recently arrived due to delays in processing letters of credit (LCs).

Imports from the Netherlands resume after 8 months: In July, bulk scrap imports from the Netherlands resumed after eight months and stood at 41,977 t in July 2024. This has added more volume to the total bulk scrap imports despite a decline in the US in July.

Price trends

• BigMint's monthly average price assessment for US-origin bulk HMS (80:20) stood at $405/t CFR Chattogram in July as against $402/t CFR in June.
  
  
• BigMint's monthly average price assessment for Japan-origin bulk H2 stood at $400/t CFR Chattogram in July, as against $397/t CFR in June.
  
  

Outlook:

A major steel producer is set to commission a $27 million plant in Mirsarai, Chattogram, with an annual capacity of 800,000 t. This new facility aims to increase the producer's market share from 23% to 34% and address rising steel demand. Originally slated to begin trial production in late July, the project faces delays due to supply chain disruptions, economic conditions, and internal challenges.

Bangladesh's steel industry, with over 7 mnt of annual production from 55 rolling mills and over 100 semi-automatic and manual plants, continues to supply 60% of its output to government projects. Given the current geopolitical turmoil and recent government changes, bulk scrap volumes for August are expected to decline compared to previous months.