Bangladesh: Imported scrap prices rise by up to $9/t w-o-w; inquiries weaken amid high inventories
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- Weak steel demand dulls outlook for early-2025
- Ongoing LC issues cap smaller mills' buying capacity
The Bangladesh imported scrap market remained slow this week due to ongoing LC challenges and weak finished steel demand. Imported scrap prices increased by $9/tonne (t) although steel mills and importers reported limited buying interest as ample inventories and subdued rebar sales continue to weigh on sentiments.
BigMint's weekly assessments
- European-origin containerised shredded was up by $9/t w-o-w at $393/t.
- European-origin HMS (80:20) increased by $4/t w-o-w to $371/t.
- US-sourced HMS (80:20) bulk prices increased by $4/t w-o-w to $370/t.
- Japanese-origin H2 bulk prices rose by $6/t w-o-w to $361/t CFR Chattogram.
Market comments
According to a major trading house, a Chattogram-based mill secured HMS scrap (Australia, bulk, 25,000-27,000/t) at $350-360/t. Meanwhile, a US West Coast bulk deal was heard at $360-365/t, though this remains unconfirmed.
As per market insiders, a major Chattogram-based mill, holding 400,000-500,000 t of scrap inventory, is less interested in securing additional volumes.
In the Japanese market, bulk HS and Sindachi were offered at $370/t, with bids from a Chattogram-based mill at $360/t. H2 scrap offers stood at $345/t, while Kanto CFR prices hovered around $342-345/t, factoring in freight costs of $40-45/t.
Additionally, Dhaka-based mills booked H2 scrap at $364/t two weeks ago and were largely inactive this week amidst financial constraints and subdued finished steel sales.
Market insiders were concerned about rebar prices, which have declined sharply to $655/t, down from $900/t last year, intensifying pressure on mills amid rising domestic inflation and weak demand.
"Our customers are unwilling to buy more scrap as they have sufficient inventory," said a Chattogram-based scrap trader.
"Steel mills have lowered rebar prices, and buyers are simply not showing interest," said another market source.
"Australia's bulk HMS (80:20) offers, at $375-380/t and shredded scrap at $385-390/t, are seeing no takers," a trader noted.
Recent deals:
- 500 t of PNS (Hong Kong) was sold at $400/t CFR Chattogram.
- 800 t of HMS mix and PNS (UAE) was booked at $385/t CFR Chattogram.
- 800 t of Heavy PNS Fabrication (UAE) was sold at $400/t CFR Chattogram.
- 250 t of HMS mix (Chile) was bought at $380/t CFR Chattogram.
Mills in Dhaka and Chattogram continue to face LC challenges, particularly for smaller vessels, while larger mills are managing with relatively flexible terms.
Payment durations change slightly, with 180-270 day LCs now more common, making landed costs higher by $40-45/t. Previously, 360-day LCs had pushed up costs by $50-60/t, including freight and usage charges.
As per market participants, in Dhaka, rebar prices were at BDT 77,000-78,000/t ($644-653/t), while in Chattogram, tags stood at BDT 81,000-82,000/t ($678-686/t). Billet prices were at BDT 62,500-63,500/t ($523-531/t)
Bangladesh's ship-breaking market faced challenges due to weak demand, dollar shortages, and difficulties in opening large-value LCs. Falling steel plate prices ($521/LDT) and a depreciating taka further pressured the market.
Chattogram received 43,936 LDT of tonnage last week, up from 24,960 LDT the previous week, including a large gas carrier. However, low steel demand and economic challenges are likely to keep the market sluggish, with significant improvement unlikely before 2025.
Outlook
The Bangladesh market is expected to remain weak in the near term, with rebar sales likely to stay subdued through early next year. Dhaka-based mills may shut down or operate at reduced capacity due to sluggish demand, while smaller buyers increasingly depend on open-sight LCs at an exchange rate of BDT 122/$. Ample scrap inventory in Chattogram and weak steel demand in Dhaka will continue to strain the market, making a near-term recovery uncertain.
