Bangladesh: Imported Scrap Offers Decline; Domestic Steel Sales Plummet

Imported scrap offers to Bangladesh have continued to move down for yet another week due to downtrend at global level and low domestic demand. Trades remained very limited with few deals of Shredded and HMS getting reported at decreased prices, while most buyers are still away from the market, due to disrupted cash flow from severely slow steel sales amid lockdown.

Assessment for shredded 211 scrap to Bangladesh from Europe and North America stands at USD 272-275/MT CFR Chittagong. A couple of bookings were reported at USD 272/MT CFR for shredded, while most offers remain around USD 275/MT CFR, down from USD 283-285/MT in the week before. Apart from a few trades, buyers' inquiries remained limited.

HMS 1&2 (80:20) was mostly offered at around USD 246-250/MT CFR Chittagong as per origin, with buyers bidding at around USD 240-242/MT CFR for the same. One sale was reported at USD 243/MT CFR for Brazil origin HMS 1&2 (80:20) earlier this week. Offers from Europe remained limited.

Industry sources reported that steel sales dropped by around 80% for most mills in April '20 and only 20% of regular sales were recorded in the month. Only a few government contractors are purchasing currently. This has led to a cash flow crunch, preventing steel mills from booking raw materials even on reducing price levels.

"Even in May'20, demand is likely to remain same as April, due to Ramadan and Eid, while how soon the covid-19 pandemic is defeated in Bangladesh, will determine the domestic demand for June" shared another steelmaker in Chittagong

Even the domestic shipyard scrap has come down from BDT 33,000/MT levels to BDT 30,000/MT ex Chittagong (inclusive of taxes), over the last few weeks, but still the low demand has kept trades very limited, shared trade sources and reported the Rebar and Billet offers by medium mills in Dhaka at BDT 54,000/MT and BDT 42,000/MT ex plant inclusive of taxes.