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Bangladesh: Imported ferrous scrap prices rise up to $5/t w-o-w; demand dull amid construction halts

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Melting Scrap

BigMint Bureau

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9 Oct 2024, 19:38 IST

Bangladesh: Imported ferrous scrap prices rise up to $5/t w-o-w; demand dull amid construction halts

Bangladesh's imported ferrous scrap price increased but demand continued to remain downward due to halted government projects that consume a major share of domestic steel.

A Bangladeshi steel mill representative said, "We are buying scrap slowly as finished steel sales are low. We are producing around 60% of our capacity. We have stock in the pipeline and will buy next month."

"With the ongoing rainy season and flooding in some areas, many construction projects have come to a halt, further slowing the already sluggish economy," another trader said.

A Bangladesh-based importer said, "Current offers stand at $415-420/t for shredded from Australia and New Zealand, while HMS (80:20) is quoted at $390-395/t, and HMS (90:10) at around $400/t from the same regions. Meanwhile, Singapore's PNS is being offered at $435/t. Despite the supply, buyers remain cautious due to the challenging market conditions."

Recent deals in Bangladesh include the sale of 1,000 t of Chilean HMS 1 at $412/t CFR Chattogram and 700 tonnes of UAE HMS mix PNS at $415/t CFR Chattogram, with payment terms set to LC.

As per market insiders, Last week, Chinese demand drove both finished product and scrap prices significantly higher. Over the weekend, a minimal purchase of 1,000 tonnes of HMS (90:10) was made at $388/t, sourced from Australia. Market participants are now exercising caution, carefully timing their procurement decisions amidst the fluctuating prices.

A major trading house representative said that, currently, there are no bookings for containers, but there was a bulk trade involving 10,000 tonnes of busheling scrap sourced from Japan, booked at $405/t CFR for delivery to Chattogram by the end of December. There is optimism in the market, with hopes for a potential upward trend soon.

Assessment prices

BigMint's assessment of Europe-origin containerised shredded was up by $5/t w-o-w to $408/t, while HMS (80:20) prices stood at $396/t, an increase of $3-4/t from last Wednesday's assessment.

BigMint's latest weekly assessment indicates that US-origin HMS (80:20) bulk prices stood at $385/t, up $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 52,500-53,000/t. Meanwhile, plate scrap from ship-breaking was at around BDT 59,000-61,000/t. Rebar offers in Dhaka stood at BDT 80,000-82,000/t. In Chattogram, these were reported at BDT 84,000-85,000/t.

Bangladesh's ship recycling market faces severe challenges amid economic and political turmoil. Demand has plummeted, and activity has stalled due to recent riots, heavy rains, and worker unrest from widespread business closures. Flooded highways have disrupted transport, leaving steel products stuck in yards, while plate prices remain stagnant. The weakening taka, now at BDT 119.55 against the US dollar, adds to the strain, with fewer ships arriving and only small vessels from the Far East present. With inflation and strong freight markets deterring ship arrivals, the sector is expected to see limited improvement soon. The total tonnage at Chattogram Port this week was at 19,599 LDT.

Outlook

Interest in imported scrap in Bangladesh is expected to remain range-bound and a potential rebound in demand is expected post-rainy reasons and flood disruptions. On the other hand, a weakening Taka is expected to put downward pressure on imported scrap inquiries from Bangladesh, especially from US and UK.