Bangladesh: Imported ferrous scrap prices witness mixed trends with limited buyer interest

• Buyers are preferring shorter transit scraps
  
  
• Market activity slows down amid initial monsoon
  
  

In Bangladesh, ferrous scrap prices witnessed mixed trends w-o-w with buyers showing limited interest in scrap from the UK and Europe due to high freight rates. They are preferring shorter transit scraps from Singapore, Malaysia, Hong Kong, and Australia.

Market activity has decelerated amid adverse weather conditions and the initial monsoon period. Indicative offers of shredded scrap from the UK and Europe were observed at $420-422/t CFR Chattogram, with HMS (80:20) offers standing at $402-405/t CFR.

According to a market insider, last week saw minimal significant sales activity, apart from some small container bookings originating from the Far East and Canada, alongside a few inquiries from Australia. Overall, the market was slow-moving with limited engagement.

Offers of PNS scraps from Hong Kong were reported at $450/t CFR, while buyers' bids were heard at $445/t CFR, according to market sources.

According to a major mill source, current prices stood at $420-425/t for shredded scrap and $400-408/t for HMS (80:20), sourced from Australia, the US, and the EU. While offers are in line with these figures, in certain instances, HMS (80:20) was offered $1-3/t higher. However, buyers are showing little urgency, likely due to the off-season.

As per inputs from another trader, focus is now narrowed to deals involving Australia, Sweden, Canada, and Chile. Despite the US shredded being offered at $425/t, it is deemed non-viable, and prospects from the UK/EU are hindered by elevated freight rates. Interest primarily lies in sourcing materials from Singapore, Malaysia, and Hong Kong due to their shorter transit times. Although letters of credit (LCs) processing has shown some improvement, it still takes approximately 15-20 days, extending to a month for LCs involving 2,000-t volumes.

Change in assessment price:

• BigMint's assessment of Europe-origin containerised shredded dropped by $2/t w-o-w to $420/t, while HMS (80:20) prices stood at $404/t.
  
  
• BigMint's latest weekly assessment shows US-origin HMS (80:20) bulk prices were stable at $402/t CFR Chattogram.
  
  
• BigMint's weekly assessment for Japan-origin H2 bulk prices decreased by $2/t w-o-w to $398/t CFR Chattogram.
  
  

Japanese H2 offers were in the $396-400/t range, while buyer inquiries hovered at around $392-394/t CFR.

As per another supplier source, Dhaka-based mills have placed bids at $405-$405/t for HMS (80:20) sourced from Australia. Additionally, an offer from Peru has been noted at levels between $420 and $425/t, with materials from Peru commanding a premium due to their higher quality, particularly in the HMS (90:10) grades. Negotiations are currently ongoing, taking into account Dhaka-based mills' tendency to bid higher compared to Chattogram by approximately $8-$10/t, inclusive of all transportation costs.

Recent deals:

Around 3,000 t of HMS (90:10) from Canada were sold at $398/t on a CFR Chattogram basis.

A parcel of 100 t PNS from UAE was sold at $430/t on a CFR Chattogram basis.

Domestic market:

Regarding the current domestic market situation, rebar in Dhaka is priced at BDT 89,000/t ($758/t), while billets are at BDT 76,000-77,000/t (equivalent to $647-656) exw. Ship-breaking scrap prices locally are between BDT 61,000-62,000/t (equivalent to $520-528/t). As per sources, the Bangladesh Steel Manufacturers Association (BSMA) has enforced a pricing standard, stipulating that no sales can occur below these rates despite consistent demand.

Meanwhile, a prominent mill in Bangladesh is experiencing better activities with rebar prices soaring to BDT 94,000-95,000/t . This has widened the price gap to BDT 6,000/t between Dhaka and Chattogram grades.

Outlook: During the off-season or monsoon period, imported scrap prices are expected to decrease in the short term. Despite suppliers maintaining high offers due to scarce material availability and escalating freight rates from key origins, buyers are inclined to hold off on significant bookings, awaiting clearer price trends in the near future.