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Bangladesh: Imported ferrous scrap offers drop by $6/t w-o-w on subdued demand

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Melting Scrap

BigMint Bureau

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21 Aug 2024, 20:33 IST

Bangladesh: Imported ferrous scrap offers drop by $6/t w-o-w on subdued demand

Bangladesh's imported ferrous scrap index declined this week due to weak buying interest and ongoing political turmoil. Buyers have adopted a cautious stance, anticipating further price drops as international market offers soften. A trader said, "US bulk offers to Bangladesh have decreased as suppliers focus more on Turkiye, pushing prices down by $10-15/t compared to the last week. While major markets like Asia, Turkiye, and Southeast Asia also saw price dips, some stability is expected if buyers return with stronger bids."

According to a supplier, offers for shredded scrap from the US were at $400/t CFR Chattogram, while offers from Australia were slightly higher at $410/t CFR. Meanwhile, HMS (90:10) offers from Brazil were at $390/t CFR Chattogram.

Additionally, the Federation of Bangladesh Chamber of Commerce and Industries (FBCCI) has pointed out significant issues, such as complex customs processes and limited port capacity, that hinder the import of raw materials essential for steel production. Bangladesh's reliance on imported steel exacerbates these inefficiencies.

In a positive development, the International Finance Corporation (IFC) announced a $100 million loan to Meghna Re-Rolling and Steel Mills Limited (MRSL). This investment will support the expansion of a new Electric Arc Furnace (EAF)-based steel plant, which will have a capacity of 1.4 mnt annually and use over 90% scrap, thereby boosting the domestic steel market and reducing the carbon footprint of finished steel.

Price assessments

BigMint's daily assessment of Europe-origin containerised shredded stood at $414/t CFR Chattogram - down by $6/t from the same day of previous week, similarly HMS (80:20) prices also dropped by $6/t w-o-w to $396/t CFR.

BigMint's latest weekly assessment showed US-origin HMS (80:20) bulk prices decreased by $12/t t0 $391/t CFR Chattogram.

BigMint's weekly assessment for Japan-origin H2 bulk price dropped by $8/t w-o-w to $397/t CFR Chattogram.

Deals

Around 1,000 t of HMS-PNS mix scraps were heard to have been booked at the end of previous week from the UAE at $416/t CFR Chattogram.

About 1,000 of HMS (90:10) scraps were booked from Brazil towards last weekend at $395/t CFR Chattogram.

Approximately 1,000 t of PNS scraps were heard to have been booked from the UK by a Bangladeshi mill at $418/t CFR Chattogram.

Domestic market overview

Domestic rebar prices in Bangladesh were assessed at BDT 85,000-90,000/t ex-Dhaka and BDT 90,000-95,000/t ex-Chattogram. Shipbreaking scrap prices were in the range of BDT 60,000-63,000/t ex. A supplier said, "With local rebar prices in Bangladesh recently increasing by up to BDT 5,000/t, the demand for imported scrap has correspondingly decreased."

Outlook

Imported scrap offers into Bangladesh are anticipated to trend downward, influenced by ongoing price declines in Turkiye, the largest scrap importer. Limited offers from Japan, due to major suppliers being on summer holidays, are expected to soften further once they return, as they will be affected by the falling US prices. Meanwhile, the recent rise in domestic rebar prices has led buyers to adopt a cautious approach, delaying significant scrap imports.