Bangladesh: Imported ferrous scrap market largely silent w-o-w; weak sentiments prevail

Bangladesh's imported ferrous scrap market remains sluggish due to low demand, particularly in containerised scrap booking. Buyers are showing more interest in bulk purchases due to the availability of cheaper prices.

According to sources, HMS (80:20) in containers sold at $405 -407/t- from Australia-origin last week whereas offers for shredded scrap- $425-430/t from UK and Australia as well.

Last week, HMS(80:20) from Australia in containers was sold at $405-407/t, while shredded scrap from the UK and Australia was offered at $425-430/t. PNS offers from Australia were heard at around $430/t, but major buyers are bidding for $415-420/t. Buyers in Chattogram are seeking bulk materials to navigate through this soft phase in the market.

A European trader source mentioned that sellers are uncertain about the current situation of the Bangladesh market due to factors like the monsoon season and financial uncertainties, such as letter of credit (LC) opening issues.

Offers and indicatives

• Offers for US-origin bulk scrap remain range-bound at $400/t level CFR.
  
  
• Indicatives for Japanese-origin bulk H2 remain at around $408/t CFR, unchanged w-o-w.
  
  

Bangladesh and Japan are planning to sign an economic partnership agreement (EPA) soon to enhance bilateral trade and investment between the two nations. Bangladesh is actively pursuing trade agreements with its major partners to retain duty-free export benefits after its graduation from the group of the least-developed countries (LDCs) in 2026.

Bangladesh experienced a significant increase in import volumes in June 2023, rising by 21% m-o-m to reach 307,793 tonnes (t) compared to 255,196 t in May 2023. This surge marked the highest import level in eight months since October 2022, with the total import volume crossing 3 lakh tonnes for the first time in this period. Notably, Japanese scrap accounted for 71,099 t, approximately 25% of the total import volume for the country.

The assessment for UK-origin containerised shredded scrap stands at $425/t CFR Chattogram, largely stable with $2/t decline w-o-w according to SteelMint.

The domestic scrap market silent

The domestic scrap market is also slow, with minimal activities in major scrap yards. Local ship-breaking scrap prices remain at BDT 60,000/t ($553/t) ex-yard.

In terms of domestic steel prices, rebar in Chattogram is priced at BDT 96,000/t ($884/t), while in Dhaka, it ranges from BDT 89,000/t ($820/t). Mills are maintaining offers due to weak end-user demand, attributed to the monsoon season and slow construction activity across the country.

The Bangladeshi taka is trading around 108.55 against the US dollar, at almost the same level w-o-w.

Outlook

The imported ferrous scrap market in Bangladesh is expected to remain sluggish in the near term due to the current lesser enquiries in the market, especially for containerised scrap booking. Overall, uncertainties in the market, along with the prevailing soft phase, may continue to affect buying patterns of participants in the coming weeks. As steelmakers might increase procurement for post-monsoon production.