Bangladesh: Imported scrap market sluggish, buyers wait for Kanto tender

Bangladesh's imported scrap market witnessed a stagnant week with limited trade and lack of inquiries. The sluggish domestic finished steel market and cautious buying indicate a challenging situation for the imported scrap market. Major players have reduced purchases due to problems with LC openings and weak foreign exchange reserves.

Market analysis suggests that the approaching monsoon season may have a significant impact on current bookings for July or August shipments. Additionally, in June, buyers are likely to be absent from the last week due to Eid holidays.

Fresh offers and deals

Fresh offers in the market are for US-origin bulk scrap, which is range-bound week-on-week (w-o-w) at $405-410/t CFR. Japanese-origin H2 material remains unchanged w-o-w at $410/t CFR.

The market is eagerly awaiting the upcoming Kanto tender scheduled for 9 June. Meanwhile, customers are considering PNS scrap from Hong Kong or Singapore at $460/t. Weak foreign reserve is a concern for participants now so buying parity will be on the lower side, as per some market sources.

SteelMint's assessment for UK-origin shredded are at $465/t CFR Chattogram, up by $3/t w-o-w.

However, in a recent deal, 2,000 t of shredded scrap was traded at $460/t CFR Chattogram.

Domestic demand sluggish

In the domestic market, mills based in Dhaka are expected to discontinue operations soon due to the weakened economic conditions in the country. This downturn in the domestic market also affects the imported market.

"The production capacity in the country remains low due to electric power supply issues caused by coal shortage," said a domestic rebar supplier. As a result, local rebar prices have increased slightly w-o-w.

Fresh offers for rebar from Chittagong-based steel mills have increases, with quotes ranging from BDT 98,000-99,000/t ($908-917/t) exw, up BDT 3,000-4,000/t ($28-37/t) w-o-w. On the other hand, Dhaka-based mills have been offering at BDT 92,000-94,000/t ($852-871/t) exw, an increase of BDT 8,000-9,000/t ($74-83/t) w-o-w.

Local ship-breaking scrap prices have remained unchanged w-o-w at BDT 60,000/t ($556/t) exy.

Overall, the imported scrap market in Bangladesh is facing challenges due to sluggish domestic demand, weakened economic conditions, LC opening issues, and depreciating foreign exchange reserves. Uncertainties around the upcoming Kanto tender and impact of the approaching monsoon on bookings persist.