Bangladesh: Containerised scrap prices continue to rise w-o-w; limited inquiries amid moderate steel demand

• Upcoming Eid closures and the monsoon season likely to keep the market sluggish.
  
  
• Industry expects BDT to depreciate to 120 against USD by year-end.
  
  
• Bangladesh's budget criticised for neglecting steel sector reforms.
  
  

Imported ferrous scrap offers into Bangladesh remain firm however, current steel demand and production levels indicated that rebar, and billet prices are expected to decline further. On the other hand, buyers are facing challenges with bulk import inquiries from Australia and the US due to pricing and higher volume LC opening issues.

As per market participants, major trade flow was concentrated towards Pakistan as some traders sought active materials for their restocking.

Sellers are holding firm, anticipating a market uptick next week considering rising freight rates. However, the upcoming Eid closures in Bangladesh and the monsoon season are expected to slow market activities, keeping overall market sentiment subdued.

Bulk scrap offers and bids

US West Coast-origin cargo offers are at $410/t for HMS (80:20), $420/t for shredded, and $425/t for bonus, all on a CFR Chattogram basis. Buyers have placed bids at $405/t for HMS (80:20), $410/t for shredded, and $415/t for bonus.

Containerised scrap offers/indicatives

Containerised Australian-origin HMS (80:20) is being offered at $410/t, while buyers are bidding at $400-405/t. Most offers witnessed no buyings as both sellers and buyers adopt a wait-and-watch approach to see where the market will settle.

Australian-origin shredded is offered at $435-440/t and PNS at $450/t, but these levels are not meeting buyers' expectations. Australian-origin HMS 1 is being offered at $415/t, with East Asian offers still unviable for Bangladesh.

EU-origin shredded is offered at $423-425/t, and HMS (80:20) at $406-410/t. South American HMS 1 is offered at $424-428/t CFR.

According to a major steelmaker in Bangladesh, fresh bookings will be slow even before Eid. While some buyers are active in securing materials, others are waiting to assess optimal price levels, considering current global trade flows, freight costs, and container availability within the required time frame.

Change in assessment price:

• BigMint's assessment of Europe-origin containerised shredded increased by $3/t w-o-w to $426/t, while HMS (80:20) prices stood at $407/t (increased by $3/t w-o-w).
  
  
• BigMint's latest weekly assessment shows US-origin HMS (80:20) bulk prices were increased by $3/t t0 $405/t CFR Chattogram.
  
  
• BigMint's weekly assessment for Japan-origin H2 bulk price is unchanged w-o-w at $398/t CFR Chattogram.
  
  

Recent deals

• 1000 t of PNS from Peru secured at $442/t CFR Chattogram.
  
  
• 2000 t of shredded from New Zealand/Australia booked at $428/t CFR Chattogram.
  
  
• 800 t of HMS(90:10) from Chile purchased at $410/t CFR Chattogram.
  
  
• 500 t of H2 scrap from the Philippines booked at $405/t CFR Chattogram.
  
  

Domestic market: Domestic rebar prices are BDT 89,000-89,500/t exw Dhaka and BDT 94,500-95,000/t exw Chattogram, with billet at BDT 74,000/t buyers asking and offers at BDT 76,500/t. Scrap ship ex Chattogram yard is priced at BDT 61,500-62,000/t exy.

Steel industry experts criticise the recent Bangladesh budget for lacking strategic direction and key reforms for the steel sector. The budget remains unchanged for the steel industry, focusing instead on education, health, agriculture, local government, and technology. Critical issues like export competitiveness and renewable energy are unaddressed. Significant reforms in energy, banking, and port sectors are missing, raising concerns about sustainable development and economic resilience. Additionally, the budget fails to tackle high inflation, stabilise foreign debt servicing, and boost private investment, which may impact economic stability and growth.

Weak currency exchange: Bangladesh's taka (BDT) is expected to depreciate further to around 120 per dollar by year-end as the central bank adopts a more flexible exchange rate policy, aligning it with market rates. This adjustment, recommended by the IMF and implemented through a crawling peg system, aims to address distortions caused by the previous fixed exchange rate regime. External pressures and concerns over foreign reserves prompted this move, which has already led to a nearly 8% depreciation this quarter. To counter economic challenges, Bangladesh is also implementing austerity measures and shifting to market-based interest rates to manage inflation.

Outlook: According to market participants, the imported market is expected to remain range-bound, with minimal purchasing activities as steelmakers closely monitor global price trends amid increasing freight rates from key exporting regions.