Bangladesh: Imported scrap offers increase on global strengthening

Imported scrap offers to Bangladesh moved up this week in spite of very limited demand from domestic mills, as the global prices began to climb up on active bookings in other markets like Turkey, Taiwan, Vietnam etc. Meanwhile local steelmakers in Bangladesh continue to operate at lower capacity utilization due to lower steel demand, a scenario likely to continue for quite some time.

SteelMint's assessment for Shredded 211 scrap stands at USD 296-300/MT CFR Chittagong, with most offers now being closer towards USD 300/MT mark. These high price levels are not getting traction from Bangladeshi buyers, most of whom are staying away from the imported scrap market, especially with the low prevailing production levels, already good scrap inventory from the active March'20 bookings which have arrived, and cheaper alternative of Ship yard scrap. Hence no major containerized Shredded bookings were reported as yet this week

HMS 1&2 (80:20) offers now stand at around USD 270/MT CFR levels, a sharp upturn against the previous weeks. Some HMS 1&2 offers from the UK were as high as USD 272-273/MT level, on low availability. HMS 1 offers from Australia, New Zealand, Canada and such origins were reported at close to USD 285/MT CFR, even as buyers remained less interested.

"We are operating at more than 50% capacity now, having increased it gradually, and hence will not require to make fresh bookings till June month, while on an overall basis too, buying of imported material will be quite slow in near term" shared a Dhaka based steelmaker.

It is being reported by reliable sources that with the fall in steel demand, it is the larger steelmakers who are facing more difficulties, having to operate at below 40% capacity, which increases the cost additionally, while some of the smaller steelmakers are now reaching 65-70% of capacity, and are managing relatively better, although the sentiments of finished steel in demand and price terms look bleak. Domestic Billets were reported to being offered at BDT 41,000-41,500/MT Ex Plant in Dhaka, down by 1000-1500/MT, leaving mills with an even tighter margin.