Bangladesh: Imported ferrous scrap prices drop w-o-w as sellers test market amid eased LC approvals

In Bangladesh, demand for imported scrap improved post-January elections, driven by improved LC approvals and heightened domestic steel production and sales. However, offers dropped which activated the market lately.

It may be recalled, imported ferrous scrap offers had remained on the higher side over the last two weeks at $445-450/t for shredded and $420/t for HMS from UK/Europe. But the elevated price points had few takers from Bangladesh.

But LC approvals improved lately, following the election and government re-formation and injection of funds. Forex reserves improved, easing LC approvals that created a better interest among buyers. Since suppliers had met with dull response earlier, they dropped their offers lately to test the market. The response was better this time in terms of transactions/new deals. Multiple bulk deals were closed clinched. Around 15,000-20,000 t of containerised scrap deals took place in last seven to ten days across various grades and origins like Chile, Singapore, Malaysia, Australia and Europe.

Thus, shredded scrap offers from Europe dropped to $433-435/tonne (t) CFR Chattogram. Offers for Japanese H2 scraps were at $428-430/t, with some buyer hesitation due to higher prices compared to other markets. US-origin HMS (80:20) bulk indicatives were heard at $430-435/t levels with buyer inquiries at $425-428/t, CFR Chattogram

The Europe-origin shredded scrap (containers) assessment by BigMint dropped by $5/t w-o-w to $434/t, while the HMS (80:20) containers assessment dropped by $1/t to $414/t.

Notable bulk deals included a US recycler selling two 30,000-t bulk cargoes of HMS and shredded scrap to a Bangladeshi mill and another mill securing bulk HMS (80:20) and PNS scrap from Australia at around $414/t and $424/t CFR, respectively.

As per a major trading house in Bangladesh, December bookings were subdued due to election-related issues and LC challenges, but there was an increase in fresh bookings post-elections and improved LC approvals.

An official from a steel mill informed that there is an uptick in imported scrap demand, citing eased bank approvals for LCs and positive signs in the domestic steel market.

Recent transactions included a mixed material deal from Europe at $418/t CFR Chattogram and an 8,000-t shipment of mixed scrap from Australia, Poland, and Chile.

Recent deals

Approximately 1,000 t of HMS-PNS mix scraps were booked from the Middle East at $440/t CFR Chattogram.

About 500-t of PNS scraps were booked from the Maldives at $430/t CFR Chattogram.

A parcel of 500-t Hong Kong-origin PNS scraps were sourced at $455/t CFR Chattogram.

About 1,500 t of HMS-PNS mix scraps were procured from Chile at $438/t CFR Chattogram.

Around 5,000 t of HMS (80:20) scraps were booked from New Zealand at $411/t CFR Chattogram.

Approximately 5,000 t of HMS (80:20) were procured from Australia at $412/t CFR Chattogram.

A parcel of 1,000 t of shredded scraps was sourced from Australia at $432/t CFR Chattogram.

About 1,000 t of PNS scraps were booked from Brazil at $440/t CFR Chattogram.

Approximately 1,000 t of sheared HMS were brought from Chile at $416/t CFR Chattogram.

Around 1,000 t of PNS scraps were procured from Hong Kong at $445/t CFR Chattogram.

A parcel of 1,000-t of HMS bundles was procured from Brazil at $394/t CFR Chattogram.

Domestic market: In the domestic market, billet prices were assessed at BDT 77,000/t ($702/t), while shipyard scraps were being offered at BDT 64,000-65,000/t, while PNS quality scraps stood at BDT 68,000/t ($620/t). Domestic rebar prices were at BDT 86,000-94,000/t ($784-857/t) across Dhaka and Chattogram.

The National Board of Revenue (NBR) commenced pre-budget discussions for FY 2024-25 on 4 February. The month-long discussions aim to ensure a participatory, rational, balanced, and people-oriented budget. Overall, the aim is to gather input from various stakeholders to shape a comprehensive and inclusive budget for the upcoming fiscal year.

Outlook: According to market insiders, an optimistic sentiment is anticipated, coupled with sufficient scrap availability, which could prompt a minor adjustment in offers. This is driven by expectations of a rebound in the domestic steel market in the near term.