Bangladesh: Imported ferrous scrap offers remain stable amid slow trading
In Bangladesh, imported ferrous scrap prices remain largely stable amid sluggish activities in the market, although high offers and lower bids from buyers has kept trades...
In Bangladesh, imported ferrous scrap prices remain largely stable amid sluggish activities in the market, although high offers and lower bids from buyers has kept trades slow. Shredded scrap offers from Europe were heard at $425-430/t CFR Chattogram, while HMS (80:20) stood at $405-410/t CFR.
Ongoing issues with LC delays and currency flow constraints have kept market activities subdued. Increased purchasing from Turkiye at higher prices has made buyers cautious and introduced volatility in prices.
Malaysian busheling bundle offers were heard at $440-442/t CFR Chattogram, but these are not workable levels, whereas PNS offers from Europe and Hong Kong were heard at around $432-435/t CFR, as per market reports.
Middle East-origin HMS 1 & PNS mix materials, totaling 12,000-14,000 t, sold at $415-417/t CFR Chattogram last week as per market participants.
According to a trader source, "Bangladesh's steel market is facing challenges this week as Letters of Credit (LC) openings experienced a significant drop, slowing from 2-3 LCs per week to just one every 15-20 days. The shortage of dollars in the market, as reported by banks, has contributed to this decline."
According to market experts, the scarcity of dollars has led to numerous import payments facing delays or renegotiations. This situation has provided banks with additional time to secure the required foreign currencies.
Recent offers
US-origin bulk offers for HMS (80:20) were heard at around $405/t CFR Chattogram.
US-origin Shredded bulk offers were heard at around $405-410/t and Bonus offers at $415-418/t CFR Chattogram.
Containerised shredded offers from UK/Europe were heard at $425-430/t on a CFR Chattogram basis.
Containerised HMS & PNS mix offers from the Middle East were heard at around $420-424/t CFR.
Recent deals
A parcel of 1,000-t of shredded scrap from Malaysia was sold at $420/t CFR Chattogram.
Around 500 t GI bundles from the Philippines sold at $390/t on a CFR Chattogram basis.
Domestic market:
In the domestic market, local ship-breaking scrap offers were heard between BDT 61,500-62,000/t, whereas PNS-grade scrap was heard at around BDT 66,000-68,000/t. Rolling mills offered rebar in the range of BDT 83,000-86,000/t exw Dhaka, while primary mills priced their products above BDT 93,000-95,000/t exw Chattogram. Billet offers were heard at around BDT 80,000/t on an ex-Dhaka basis, influenced by reduced production and shortage of supplies.
The election schedule is set to be unveiled against the backdrop of political unrest which has gripped the country since 28 October. Both ruling and opposition parties conducted rallies marked by extensive violence in the capital. The foreign exchange market in Bangladesh continues to show weakness, and economists attribute this decline in reserves to what they perceive as misguided policies by the Bangladesh Bank. Despite the Bank's efforts to bolster reserves, the disparity between financial accounts and current account balances poses a significant challenge, rendering these initiatives ineffective, as noted by bankers.
Outlook: The outlook remains cautious as buyers have adopted a wait-and-see stance amid LC-related challenges and liquidity issues. The steel market's performance is closely linked to all the challenges mentioned above, and market participants are monitoring developments as the week progresses.
