Bangladesh: Imported scrap prices drop by up to $5/t w-o-w; inquiries slow despite fall in rebar prices
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- Kanto tender sees H2 scrap booked at $350-355/t CFR
- Rebar prices decline as mills focus on clearing inventory
The Bangladeshi imported scrap market was slow this week, with minimal deals and weak buyer interest. Prices fell by up to $5/tonne (t) w-o-w, with offers for shredded from the UK/EU at $386-390/t and HMS at $366-370/t.
Rebar sales in Dhaka and Chattogram remained sluggish despite ongoing discounts. Additionally, steel producers have reduced prices by nearly BDT 7,500-8,000/t ($63-67/t) since the beginning of the month in an effort to clear out inventory and cover operating costs. However, inquiries for scrap remained low despite the fall in rebar tags.
As per market participants, in Dhaka, rebar prices were at BDT 77,000-79,000/t ($644-$661), while in Chattogram, tags stood at BDT 81,000-82,000/t ($678-$686/t). Billet prices were at BDT 63,000/t ($527/t).
BigMint's weekly assessments
- European-origin containerised shredded was up marginally by $1/t w-o-w at $384/t.
- European-origin HMS (80:20) declined by $3/t w-o-w to $367/t.
- US-sourced HMS (80:20) bulk prices softened by $4/t w-o-w to $366/t.
- Japanese-origin H2 bulk prices dropped by $5/t w-o-w to $355/t CFR Chattogram.
Market scenario
The latest Kanto tender for December closed with the winning bid at JPY 42,739/t ($281/t) on FAS basis. Notably, 15,000 t of H2 was heard to have been booked by a Chattogram-based mill. Bids dropped by JPY 2,441/t ($16/t) from the previous tender.
As per market participants, the FOB price is estimated at $290-295/t, stable with the last tender after accounting for currency fluctuations. The CFR price of the cargo is expected to be at $350-360/t, considering a FOB tag of $290-300/t and freight of $50-60/t, matching last month's level.
Industry reports mentioned that the government's source of sales has completely dried up, as public construction projects have come to a halt following the ouster of the previous administration through a mass uprising. As a result, many steel mills have been forced to shut down their furnaces due to the financial losses incurred.
A Chattogram-based importer stated, "Workable bulk levels are at around $350/t for Japan (H2) and $360/t for US (HMS). While a recent Turkish deal lifted prices by $10/t, daily offers from Japan and the West Coast remain under pressure. Buyers here are staying cautious amid uncertainties in freights and currency movements."
A Dhaka-based trader said, "Local scrap prices in Bangladesh are currently at BDT 48,500-50,000/t ($406-418/t). African-origin HMS is at $350/t, while sales of European HMS are currently on hold for winter. In Southeast Asia, HMS is priced at $370/t in Malaysia, Indonesia, and Singapore, with shredded offered at $390/t."
A major mill-side participant said, "To pay employee salaries, utility bills, and loan instalments, mills are selling products below their production costs. This is a necessary move to keep operations running despite financial losses."
Bangladesh's ship-breaking market faced challenges last week due to economic pressures and increased competition from India's specialised units. Despite this, signs of recovery emerged, with firmer pricing and new tonnage at Chattogram. Steady steel prices at $521/LDT and a 6.5% increase in the purchasing manager's index (PMI) in November showed improvement, though a weak taka and slow construction activity hindered growth.
Chattogram Port recorded an increase in tonnage arrivals this week; it received 24,960 LDT compared to 16,952 LDT the previous week.
Outlook
Bangladesh's scrap market will likely remain under pressure as supplier's offers and buyer's bids stay misaligned. Weak steel demand in key markets has added to the uncertainty. Buyers are cautious, expecting a possible rebound during the winter holidays, with most opting for limited purchases until clearer price signals emerge.
