Bangladesh: Imported bulk scrap offers drop w-o-w; mills make active bookings as domestic tags rise

• Mills restock amid approaching Ramadan
  
  
• Rebar sales remain sluggish, prices drop
  
  

Bangladesh's imported bulk scrap prices fell w-o-w, while tags of containerised scrap were range-bound w-o-w. With Ramadan (28 February-29 March) approaching, mills were intent on actively procuring cargo, with several deals confirmed from different sources. The market is expected to recover to a large extent by March or April.

Meanwhile, the domestic scrap market witnessed an uptrend w-o-w, with prices assessed at BDT 53,000-54,000/tonne (t) ($435-444/t). Mills made active bookings in the imported scrap market amid higher prices of domestic material.

BigMint's weekly assessments

• European-origin containerised shredded rose by $2/t w-o-w to $383/t.
  
  
• European-origin HMS (80:20) dropped by $2/t w-o-w to $362/t.
  
  
• Bulk US-sourced HMS (80:20) fell by $6/t w-o-w to $369/t.
  
  
• Bulk Japanese-origin H2 stood at $353/t CFR Chattogram, down by $3/t w-o-w.
  
  

Market insights

As per market insiders, the Bangladeshi imported scrap market showed a slight improvement over the last seven days, with mills beginning to evaluate offers more actively. Mills were focused on securing cargo ahead of the Ramadan period.

Domestic billet prices ranged within BDT 70,000-71,000/t ($575-584/t), while rebar tags dropped by BDT 1,500-2,000/t ($12-16/t) w-o-w to BDT 85,000-86,000/t ($698-707/t) in Chattogram, as slow demand for rebars continued.

Offers for HMS (80:20) from Brazil and the US were at $355-360/t CFR.

Meanwhile, Australian shredded was quoted at $378-380/t CFR. PNS from Brazil and the US was available at $380-384/t CFR, while HMS (90:10) from Brazil was offered at $360-365/t CFR. However, there were no firm inquiries from buyers.

A buyer stated that they procured 3,000 t of shredded from Australia at $385/t and an additional 2,000 t from New Zealand at the same price. Due to high local scrap prices, steel plants were opening letters of credit (LCs) and booking imported material, as it was more cost-effective.

A source from a Dhaka-based mill said that steelmakers were facing sluggish sales, with some trying to maintain margins by increasing rebar prices. However, weak end-user and project demand provide little support.

As per an overseas trader, freights from Hong Kong to Bangladesh ranged within $45-50/t, which varied according to the shipper. As a result, the material cost stood at approximately $350-355/t FOB, still on the higher side compared to most buyers' expectations.

A major Chattogram-based steel mill highlighted that the market was showing signs of improvement compared to December, with their mills now fully utilising their 2.4-2.5-million tonne (mnt) capacity. Previously, high inventories had led to a slowdown in purchasing, but mills have resumed buying.

Chattogram ship recycling market

Bangladesh's ship recycling market saw steady arrivals, particularly from the Far East, but remained subdued due to economic challenges. Weakening currency, stagnant steel prices, and stalled steel trade hampered activity. Despite this, demand for Panamax bulkers and LNG carriers persisted. The government emphasised that yards needed to comply with the Hong Kong Convention (HKC), while high-priced unsold vessels limited price increases.

Outlook

Sources indicate that mills are likely to make decisions once there is more clarity, with a clearer outlook expected after March. While the market is expected to remain slow until then, there is cautious optimism for improvement following Ramadan.