Bangladesh: Imported ferrous scrap prices continue to rise; weak steel demand dampens trade

• Bangladesh's ship recycling market sees downturn
  
  
• US dockworkers' strike expected to push up prices
  
  

Bangladesh's imported ferrous scrap market further softened this week, driven by reduced construction activity and weak purchasing interest, particularly among rebar sellers and steel suppliers involved in government projects.

Meanwhile, offers from the UK, Australia, UAE, and the US continued to rise amid reviving global ferrous scrap sentiments, such as a rise in iron ore prices and a supportive Chinese market.

A UAE-based trader commented, "Offers for UAE HMS scrap are at $395/tonne (t) CFR Bangladesh, while bids remain low at $380/t, creating a bid-offer gap and softening market activity."

According to another UAE trading house representative, "Bangladesh is targeting a price of $398/t for ferrous scrap from the UAE." They noted that importing from Vietnam was not feasible due to freight mismatches and lower purchasing levels in the market.

A Bangladeshi trader said, "Demand for imported scrap in Bangladesh is anticipated to remain under pressure, with limited prospects for improvement due to ongoing economic instability. Additionally, political uncertainties and challenges with trade routes have dampened interest in imports from distant regions such as Australia and South America. For instance, Australian-origin HMS (90:10) were heard at $400/t CFR, but buyers are only willing to engage at $390/t CFR."

Another Bangladeshi trader said that the strike called by the International Longshoremen's Association is likely to drive up prices, as the US is one of the largest exporters of metal scrap, and this incident may reduce supply. It will also partially impact bulk scrap shipments to countries such as Taiwan, Thailand, Bangladesh, and Turkiye, creating short-term supply chain disruptions and scarcity. However, currently, the market in Bangladesh is quiet, with buyers showing little interest in inquiring about US supplies.

As per major market insiders, "In Bangladesh, offers for Chile HMS (90:10) in 40 ft containers are at $390/t, while buyers are requesting Australian HMS at $370-375/t for 24 t loading. Currently, no suppliers are willing to sell at these prices. Additionally, buyers are looking for shredded scrap from New Zealand or Australia at $390-395/t, but again, there are no suppliers available for these quotes."

• BigMint's assessment of Europe-origin containerised shredded was up by $8-10/t w-o-w to $403-405/t, while HMS (80:20) prices stood at $392/t, an increase of $6-8/t from last Wednesday's assessment.
  
  
• BigMint's latest weekly assessment indicates that US-origin HMS (80:20) bulk prices stood at $380/t and rose $5/t from last week.
  
  
• BigMint's weekly assessment indicates that Japan-origin H2 bulk price remained stable w-o-w at $365/t CFR Chattogram.
  
  

Domestic market

In the domestic market, local scrap prices were heard in the range of BDT 51,000-52,000/t. Meanwhile, plate scrap from ship-breaking was at around BDT 58,000-60,000/t. Rebar offers in Dhaka stood at BDT 83,000-85,000/t. In Chattogram, these were reported at BDT 88,000-89,000/t.

A major steel mill in Chattogram commented, "We are not actively seeking scrap from regions such as Australia, the UAE, Hong Kong, or the US, as we currently maintain sufficient inventory. We will plan to assess fresh inquiries towards the end of October, contingent on any uptick in steel demand and our production levels."

A Dhaka-based steel mill highlighted, "Rebar prices are currently at BDT 83,000-84,000/t in Dhaka and BDT 87,500-88,500/t in Chattogram, with billets priced at BDT 68,500-69,000/t and local scrap at BDT 51,500-52,500/t. The rebar market is notably inactive, with limited sales and purchases. It will take time for the economy to stabilise, especially post-monsoon, and with support from the International Monetary Fund (IMF) before we can expect a return to momentum."

Bangladesh's ship recycling market is in decline this week, struggling to compete with India. Chattogram's yards faced fewer vessel arrivals and slipped to the second spot in global rankings, with only two ships this week. Vessels from the Far East favoured Indian yards in the wake of Bangladesh's ongoing challenges. The political turmoil, severe flooding, falling steel plate prices at $538/t, and a weakening taka against the dollar led to a decline in Bangladesh's ship-breaking market.

IMF pledges support to Bangladesh

BIWTA suspends vessel operations

The Bangladesh Inland Water Transport Authority (BIWTA) has halted all vessel operations in coastal areas due to inclement weather. This has affected routes from Dhaka to Hatia, Betua, Khepupara, Charmontaj, Rangabali, and Monpura until further notice. A cautionary signal number 3 has been raised at all seaports due to rough river conditions posing navigation risks.

Outlook

Interest in imported scrap in Bangladesh is expected to remain under pressure due to ongoing economic instability and declining construction activity, which will keep demand low. Additionally, a weakening taka is expected to weigh on imported scrap inquiries from Bangladesh, followed by a rising price trend in the global market.