LC openings remain slow as forex situation still under pressure
Bangladesh's imported ferrous scrap prices continued to decline by up to $8/t w-o-w with subdued buying interest among market participants.
Indicative prices for shredded material from the EU and UK stood at $390-395/t, whereas Australian shredded offers were heard at $405-410/t.
Bulk offers from the US have met with limited interest in Bangladesh as major scrap consumers expect to maintain sufficient inventories till December.
Weakening demand for long steel products, which consume a large share of scrap, has further dampened fresh inquiries.
LC constraints added one more layer to buyers' worries and kept inquiries for containerised scrap subdued as well.
Over the last seven days, around 2,000-3000 t of shredded from Australia were booked at $400-405/t CFR Chattogram, followed by around 1,000 t of HMS 1, and the PNS bundle mix which were sold at $405-408/t CFR.
As per market participants, as buyers remain cautious multiple offers from major supplying regions have not seen any active response.
Australian HMS (90:10) is offered at $388-390/t, with bids around $380-382/t, while shredded is at $400-405/t against bids of $390-392/t. Southeast Asian offers from Hong Kong and Malaysia for PNS are at $410-412/t, and Malaysian busheling at $418-420/t.
In the bulk market, Japan's H2 scrap is being offered at $376-380/t, with bids at $366-370/t, while HS was heard at $398-400/t against bids of $392-394/t.
From the US, HMS (80:20) is being offered at $386-388/t, with bids at $375-380/t, while shredded ranges from $400-402/t, with bids at $392-395/t.
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Europe-origin containerised shredded scrap fell by $8/t w-o-w to $392/t, while HMS (80:20) prices dropped $7/t to $380/t.
US-origin HMS (80:20) bulk prices declined by $3/t to $378/t.
Japan-origin H2 bulk prices rose by $1/t w-o-w to $369/t CFR Chattogram.
Bangladesh's ship recycling market is slowing down, with local steel plate prices falling by $7/t due to weak demand and losses from high-priced purchases. Sellers from the Far East are contemplating redirecting their vessels to India and Pakistan. Challenges in securing letters of credit and unpaid loans from the previous government have raised concerns about domestic reserves. As the government restructures debt and tightens loan restrictions, Bangladesh may soon face empty ports, despite improving dry tonnage imports in neighbouring countries.
Domestic market
In the domestic market, steel rebar prices are at BDT 84,500-85,500/t exw Chattogram, with rebar prices in the Dhaka region standing at BDT 81,500/t. Billet is being quoted at BDT 66,500-67,500/t, local scrap at BDT 50,500-51,000/t, and local PNS at BDT 54,000-54,500/t.
The National Board of Revenue (NBR) is offering a 10-year tax exemption for renewable energy plants starting production between 1 July 2025 and 30 June 30. These plants get full tax exemption for five years, 50% tax for the following three, and 25% for the last two, aiming to boost green energy and reduce fossil fuel dependence.
Bangladesh's GDP growth dropped to 3.91% in Q4FY'24, down from 6.88% in FY'23, amid high inflation and declining foreign reserves. The World Bank and IMF forecast slower growth at 5.2% in FY'24 and around 4% in FY'25, respectively, due to economic and political challenges.
Outlook
Imported scrap demand in Bangladesh is expected to stay subdued, with a potential rebound anticipated in late November as major steel mills will begin restocking for upcoming production cycles. However, the weakening BDT may dampen import inquiries, adding further pressure on the market in the near term.
