Bangladesh: Imported Scrap Offers Fall; Buyers Eye Further Correction

In conversation with market participants, SteelMint learned that imported scrap offers to Bangladesh have significantly dropped this week following the continued downtrend at the global level. Meanwhile, with new tax alterations in the recently announced national budget, domestic finished steel prices are up sharply, while the industry remains watchful for more clarity.

SteelMint's price assessment for containerized Shredded scrap from North America and Europe stands at USD 330/MT, CFR Chittagong, down by USD 8-10/MT against the last week's report. Few prominent suppliers were reported to offer in the range of USD 332-335/MT CFR, however buying interest remains lower, with the market expecting a further marginal drop in prices in coming days.

Containerized HMS offers also reported to decline by USD 7/MT against last week, as South American origin HMS 1 price is being assessed at USD 318-320/MT, CFR while low-grade HMS 1&2 from Europe & Australia being offered at around USD 310-312/MT CFR Chittagong. Offers for P&S scrap in containers currently stand at around USD 340/MT, CFR however no deal reported for the same, on an expectation of further lowering from buyers.

As per the data maintained with SteelMint, the current prices for imported shreddded and HMS scrap to Bangladesh have reached 6 months low levels.

Bangladesh domestic steel market has turned positive in terms of finished steel prices post-Eid and new budget announcement, with finished steel prices increasing by around BDT 2,500-3000/MT (USD 32-36) on account of the tax changes in this year's proposed national budget, while steelmakers are understanding further impact of the budget on the steel sector.

Local shipyard scrap also witnessed an upturn with prices increasing by around BDT 1000/MT and currently standing at BDT 35,000-35,500/MT (USD 414-420), as against BDT 34,000/MT levels reported 2 weeks ago, however, suppliers are shying away from selling in large quantities amid less clarity in the market.

There is a healthy demand for Ship-breaking scrap in the market although the supply remains limited. Even though global scrap prices seem to have bottomed now, market is expecting further decline in offers to Bangladesh, on competitive prices from Indian origin sponge iron as well as local scrap.