Bangladesh: Imported scrap prices witness mixed trend; domestic steel demand sluggish

In Bangladesh, the imported ferrous scrap market continued in a slower pace with a mixed price trends observed amid limited bookings. Containerised shredded scrap from the UK and European sources dropped $3-4/t w-o-w, while HMS (80:20) offers remained largely stable at $414-415/t CFR Chattogram.

Several containerised deals, totalling approximately 6,000-6,500 t, were closed in the last seven days involving various grades and origins such as Australia, Hong Kong, and UAE.

Japanese H2 scrap offers were in the range of $425-428/t, while US-origin HMS (80:20) bulk indicatives ranged from $426-430/t, with buyer enquiries at around $422-425/t CFR Chattogram.

BigMint's assessment for Europe-origin shredded scrap (containers) dropped $4/t to $434/t, while HMS (80:20) containers rose by $1/t w-o-w to $415/t.

A mill source noted, "Bangladeshi buyers are also not active much due to slow sales. I heard HMS (80:20) indicatives at $405-408/t from Latin America and bulk shredded offers at $425/t from Australia (CFR Chattogram)."

As per market participants, in Bangladesh the LC clearance process remains volatile, and shredded containers from Australia we heard at 425-430/t, and From Europe shredded offers were heard at $434-438/t CFR; Hong Kong origin PNS offers were heard at $440-445/t CFR."

A major trading house noted, "Middle East and South African materials are being diverted to Pakistan and Bangladesh instead of India, driven by price disparities. Similarly, Australia and Brazil shipments are heading to Bangladesh due to price differentials."

According to another mill source, "UK-origin containerised shredded scrap is priced at $434-436/t, with HMS (80:20) at $416-420/t. However, demand is restrained due to challenges in issuing letters of credit for bulk scrap. Limited trades were reported this week for PNS and other grades from Hong Kong, UAE, and Australia."

Recent deals:

• Around 1000 t Australia origin shredded were sold at $425/t on CFR Chattogram basis.
  
  
• Approximately 2000 t of UAE-origin PNS mix scrap was booked at $445/t CFR Chattogram
  
  
• Around 2000 t of Hong Kong-origin PNS scrap was booked at $445/t on a CFR Chattogram basis.
  
  
• A parcel of 1000 t UAE origin PNS was booked at $445/t CFR Chattogram basis.
  
  
• Around 1500 t Australia origin HMS 1, scrap were booked at $415/t on a CFR Chattogram basis.
  
  

Domestic market: In the domestic sector, rebar prices were BDT 89,000-90,000/t ($) exw Dhaka, and BDT 95,000-96,000/t ($) ex Chattogram, while billets were priced at BDT 76,000-77,000/t($) exw. Market participants observed a slight increase in finished and semi-finished prices compared to the previous week. However, demand remained stagnant, and mills sought lower raw material costs to enhance margins with finished products.

Electric and gas price hike: Bangladesh's recent decision to hike electricity prices by BDT 0.34 and BDT 0.70 per unit, along with increases in gas prices for power plants, aims to meet IMF loan conditions. This move, coupled with plans to introduce an automated petroleum pricing formula, may impact prices of essential commodities ahead of Ramadan. Despite assurances of gradual subsidy withdrawal, experts fear heightened inflationary pressures. Criticism arises over bypassing regulatory oversight. However, gas prices for households and vehicles remain unchanged, with 37% of gas allocated for power generation. Automated petroleum pricing is set to adjust monthly in line with global fuel prices.

Outlook: Steelmakers may face output challenges due to recent electricity cost hikes, prompting them to seek lower scrap prices to protect margins. Expectations suggest imported ferrous scrap prices will stay volatile, with imports likely to decrease amid the uncertain outlook.