Bangladesh: Containerised scrap offers rise nearly $10/t w-o-w; weak demand persists

In Bangladesh, imported ferrous scrap offers and indicatives increased by $8/t w-o-w, despite limited activities. Suppliers remained firm from the US as the European market almost closed before winter. Bulk offers from the US keep increasing on better demand. Containerised shredded scrap offers from Europe were heard at $445-450/t CFR Chattogram, while HMS (80:20) stood at $428-430/t CFR.

PNS offers from Hong Kong were heard at around $445-448/t CFR, and for Brazil, HMS(80:20) offers were heard at around $410-415/t, as per market sources. Whereas Brazil-origin shredded scrap was being offered at $435/t followed by PNS at $440/t on a CFR Chattogram basis.
Similarly, HMS(80:20) from Australia was heard at $425-430/t on a CFR basis. Middle East origin HMS(90:10) were offered at $435-440/t . Currently, US west coast bulk indicatives heard at around $413-420/t on a CFR Chattogram basis.

As per a mill source, "Major steelmakers also curtailed production up to certain levels, and a few small and medium mills are operating at 35-40% production level owing to limited demand in the market."

Currently, Bangladeshi mills are going to buy 4 to 5 vessels from the the US; bulk inquiries are going on just after the Turkish market is paused now as per reliable market sources. Recent bulk deals heard to be concluded from the US at an average price of $437/t comprising a total of 32,000 t of materials (HMS(80:20), PNS, and Shredded).

Recent deals

• Around 2000t of Australia-origin HMS (90:10) sold at $415/t CFR Chattogram basis.
  
  
• Around 8500 t of Singapore-origin HMS (80:20) in bulk sold at $420/t on a CFR Chattogram basis.
  
  
• Around 8500 t of Singapore-origin PNS in bulk sold at $440/t on a CFR Chattogram basis.
  
  

Domestic market: In the domestic market, local ship-breaking scrap offers were heard between BDT 60,000-62,000/t, whereas PNS-grade scrap was heard at around BDT 63,000-68,000/t. Rolling mills offered rebar in the range of BDT 84,000-91,000/t exw Dhaka, while primary mills priced their products above BDT 95,000-99,000/t exw Chattogram. Billet offers were heard at around BDT 73,000-75,000/t exw.

Bangladesh is set to receive substantial financial support in December, including a $400 million policy-based loan from the Asian Development Bank, anticipated disbursement of $681 million from the International Monetary Fund, and active discussions for additional funds like a potential $250 million from the World Bank and $400 million from the Asian Infrastructure Investment Bank. The government is securing a total of $1.73 billion from various donor agencies to stabilise reserves ahead of the 7 January elections. Economists are optimistic that these initiatives, coupled with remittance inflows and attention to redirect dollars within the country, will prevent a decrease in reserves in December. Bangladesh Bank aims to manage reserves effectively amid daily sales of $7-8 million for fuel and fertiliser purchases, with total sales reaching around $6 billion in the current financial year.

S Alam Group investments: Dhaka-based S Alam Group is set to inject over BDT 580 billion into two approved special industrial zones sanctioned by the Bangladesh Economic Zones Authority (BEZA). The sizable investment breakdown includes BDT 350 billion for the power sector, BDT 150 billion for HR coil, BDT 75 billion for the DRI plant, and over BDT 5 billion for private economic zone development. Green steel and combined cycle LNG and hydrogen power plants are part of the initiative, supported by robust infrastructure and industrial development facilities.

Outlook: Post-election conditions will make it difficult to assess the market due to money flow constraints, as per market insiders. Imported ferrous scrap inquiries in the bulk segment are likely to see some activities to fulfill regular requirements from steelmakers.