Bangladesh: Imported ferrous scrap market sluggish; prices drop $5/t w-o-w amid limited deals

The imported ferrous scrap market in Bangladesh continued to remain sluggish with limited deals reported. A major challenge is the continued difficulty in securing Letters of Credit (LCs) for imports.

In contrast, steel major BSRM has secured an investment of $175 million to expand its steel manufacturing capacity, which market experts believe could positively impact scrap consumption in the near future.

Shredded scrap from Europe was heard at approximately $410-414/t, while indicative prices for HMS (80:20) scrap from Europe were at $395-400/t CFR HMS(8:20), and from Australia prices hovered at $395-398/t CFR Chattogram. H2 bulk offers from Japan were in the range of $410-415/t, and US-origin HMS(80:20) bulk offers were reported at $405-410/t CFR.

SteelMint's assessment for European shredded scrap stood at $414/t CFR Chattogram, down $5/t w-o-w.

A trader source said, "The market situation is not good; finished steel prices are trending upward due to LC restrictions leading to a shortage of scrap. This has pushed TMT and billet prices upward."

Recent deals

• Around 500 t of PNS scraps were sourced from Malaysia at $438/t CFR Chattogram.
  
  
• A 500-t mix parcel of HMS and PNS scrap from Peru's Callao port was booked at $430/t CFR Chattogram.
  
  
• About 1,000 t of PNS scraps were booked from Hong Kong at $440/t CFR Chattogram.
  
  
• Around 1000 t PNS scrap was heard booked from Malaysia at $430/t CFR Chattogram
  
  

A trader source said," The majority of bulk consignments for Bangladesh are around 32,000 t due to handling and shipment availability concerns. Container scrap suppliers are cooperating, allowing for waiting periods for LC opening."

Domestic market: In the local market, HMS (80:20) scrap is at BDT 61000-62,000/t and PNS grades are at BDT 65,500-66,600/t. Billet prices range from BDT 79,000-80,000/t. Rebar is selling at 83,000-85,000/t exw Dhaka, and BDT 90,000-95,000/t exw Chattogram.

The International Monetary Fund (IMF) is showing flexibility in its loan conditions for Bangladesh. During a visit by an IMF mission, there was positive negotiations regarding the disbursement of the second installment of a $681 million loan to Bangladesh. Consequently, the earlier requirement to maintain net reserves of $26.8 billion by December has been waived. By year-end, it is expected that reserves will reach $18 billion, with a target of $20 billion by the following June, which will be sufficient for securing the IMF loan. Currently, actual reserves are just below $17 billion.

Outlook: The outlook will largely depend on the Turkish market situation, which recently saw distress selling. According to market participants, new bulk sales into Bangladesh are being targeted at $395/t levels.