Bangladesh: Imported containerised scrap offers drop w-o-w; bulk rises on restocking

The imported ferrous scrap market in Bangladesh is facing challenges amid the ongoing monsoon season and reduced government expenditure on infrastructure projects, resulting in decreased demand. Consequently, numerous imported scrap deals have been cancelled.

In contrast, Europe has experienced a more stable inflow of scrap with regular offers available, as per trader sources. Bangladeshi mills have initiated restocking and recently purchased 4-5 bulk cargoes. Additionally, bulk scrap deals were concluded at approximately $435/t for shredded scrap last week and around $425/t for shredded scrap this week.

Throughout the week, scrap was sourced from various countries, including Australia, the US, Malaysia, and Oman, highlighting the flexibility in scrap sourcing.

Bangladesh has shown interest in Japanese bulk scrap, as evidenced by active participation in the Kanto tender. A major steel mill recently secured a bulk deal for H2 scrap at $415-420/t (CFR), which was initially booked at $355-357/t FAS Japan in the Kanto export tender for September.

As per a market source, "UK-origin HMS is not preferred for quality reasons. Earlier due to high freight rates from Australia, it was not viable to source scrap from that country, but these days the market is witnessing frequent deals from Australia."

Deals and offers

• 2000 t containerised scrap of Oman origin was booked at $440-442/t CFR Chattogram comprising a mix of HMS 1/PNS scrap.
  
  
• A containerised HMS (80:20) deal from Australia was heard at 423/t CFR Chattogram.
  
  
• A container deal for HMS was heard at 430/t CFR, which was concluded a few days ago.
  
  
• Shredded containers from the UK are available at $445-450 (with limited availability), while PNS scrap offers from the UK are at $450/t CFR Chattogram.
  
  
• Bulk shredded scrap from the US West Coast is being offered in the range of $432-435/t CFR.
  
  

However, containerised offers from the UK stood at $444/t, while HMS (80:20) from the UK were heard at $424/t CFR Chattogram.

Domestic market-

In the domestic market, ship-breaking scrap is currently offered in the range of BDT 55,500-56,500/t ($506-515/t), witnessing a sharp drop w-o-w. Ship recyclers have decided not to sell scrap for a few days due to unfavourable market conditions. In Dhaka, rebar prices are at BDT 82,000-82,500/t ($747-752/t), while other large mills in Chattogram are offering at BDT 92,000-93,000/t, and major steel mills are selling at BDT 94,000/t.

Forex reserves less than $22 billion - The country's forex reserves have fallen below the $22 billion mark due to import bill settlements and US dollar sales to banks. After adjusting for these payments, the gross forex reserves stand at around $21.70 billion, according to IMF. Bangladesh's reserves have been declining since reaching a record high of $48 billion in August 2021, driven by increased import payments.

First Payra Port terminal to begin operations: Payra Sea Port's inaugural terminal, located on the southern coast of Patuakhali, is set to begin operations in October. This is expected to streamline the transportation of goods and enhance efficiency at Bangladesh's third-largest seaport.

Outlook: The market outlook remains subdued due to limited demand and financial constraints. However, some bulk deals are anticipated in the coming weeks as mills focus on restocking. Meanwhile, the domestic scrap market is expected to remain sluggish due to weak demand from end-users.