Bangladesh: Ferrous scrap prices witness mixed trends w-o-w with limited trades

Imported ferrous scrap offers into Bangladesh witnessed mixed trends with a steady rise in containerised scrap prices and range-bound bulk scrap offers from the US and Japan.

The market is in a wait-and-watch mode due to bearish steel demand in the country. Buyers are still inquiring about viability as the flow of material from the Far East remains slow, impacted by rising freight costs and uncertainty in container availability.

Scrap offers/indicatives

A major steelmaker stated, "Freight costs, which ranged from $800 to $1,200 per container in March, have now surged nearly three to four times higher due to severe congestion at Yokohama port and a significant shortage of available containers. The Bangladesh market remained inactive following the extended Eid holiday, with smaller buyers facing LC issues and the long voyage times impacting trade."

EU-origin shredded indicatives were heard at $424-428/t, and HMS (80:20) at $404-410/t.

As per a major trade source, offers from Japan for HS and Sindachi at around $435/t for bulk, but no deals have been finalised due to the absence of counter bids. Able to do some trades of approximately 1,500 t of containerised HMS from Africa at $396/t. Overall, trade activity remains slow, with no offers from the UK, Europe, or Australia.

Change in assessment price:

• BigMint's assessment of Europe-origin containerised shredded increased by $2/t w-o-w to $424/t, while HMS (80:20) prices stood at $403/t (increased by $1/t w-o-w).
  
  
• BigMint's latest weekly assessment shows US-origin HMS (80:20) bulk prices were increased by $4/t t0 $404/t CFR Chattogram.
  
  
• BigMint's weekly assessment for Japan-origin H2 bulk price is unchanged w-o-w at $396/t CFR Chattogram.
  
  

Recent deals

• 1000 t of UAE origin HMS & PNS mix sold at $422/t CFR Chattogram
  
  
• 2000 t of HMS (90:10) from Australia sold at $410/t
  
  
• UAE origin 1,000 t of HMS & PNS mix sold at $435/t CFR Chattogram
  
  
• UAE 700 t of Blue Steel sold at $455/t CFR Chattogram
  
  

Domestic market: Domestic rebar prices are BDT 88,500-89,000/t exw Dhaka and BDT 94,800-95,200/t exw Chattogram, with billet at BDT 75,000/t buyers asking and offers at BDT 76,000/t. Scrap ship ex Chattogram yard is priced at BDT 61,500-62,000/t exy.

Overall LC scenario: In May, Bangladesh saw a significant increase in letter of credit (LC) openings, reaching $6.83 billion, the highest in 23 months. This surge was fueled by rising remittances and export proceeds, boosting dollar supply in commercial banks. Despite LC settlements slightly declining to $5.48 billion compared to April, the $2.25 billion influx of remittances contributed to robust dollar flows. The introduction of a crawling peg exchange rate system in early May bolstered exporter confidence, leading to more export LCs and easing import LC approvals. Looking ahead, LC openings may experience a temporary decline in June due to post-Eid holidays and reduced industrial activity, continuing a trend of fluctuation in the market.

Outlook: Market participants foresee a slightly firm imported market in the containerised scrap segment, with regular bookings from Australia and the UAE. Steelmakers are expected to prioritise better pricing and prompt shipments, maintaining a cautious trend in their purchasing decisions.