Bangladesh: Mills raise rebar prices on rising imported scrap price

Bangladesh's steel producers have been mostly inactive in the market for yet another successive week. The steel producers are cautious due to liquidity issues. Notably, steel mills continue to raise their prices due to raw material shortages and volatile national currency.

Further, demand from end-users remained negligible, owing to an uncertain market situations. Domestic scrap prices increased significantly due to material shortages. Due to this, rebar prices increased, according to a SteelMint source.

SteelMint assessed domestic rebar prices at BDT 95,000/t ($892/t) exw-Chittagong, up by BDT 2,000/t. Following suit, mills in Dhaka increased their rebar offers by BDT 2,000-3,000/t w-o-w. Fresh offers are now at BDT 90,000-92,000/t ($845-864/t).

Market participants anticipate that rebar prices may soon cross BDT 1,00,000/t exw, as around 90% of the scrap steel used is imported. Hence, production costs increased due to a recent hike in fuel and energy prices amid the ongoing US dollar crisis.

Steel manufacturers are likely to adjust their prices due to the higher production costs. This will put pressure on consumers and increase the cost of development projects, putting pressure on public expenditure, SteelMint noted.

Nevertheless, local ship-breaking scrap prices rise sharply by BDT 2,000-4,000/t w-o-w to BDT 70,000-72,000/t ($657-676/t) ex-yard Chittagong.

Imported scrap market remains quiet; offers up

Bangladesh's imported scrap market continued to maintain silence, with trading activities mostly absent. However, prices continued to rise significantly. The offer-bid mismatch and the delay in the new LC opening kept buyers at bay.

Fresh offers for US-origin bulk HMS are heard at $460-470/t CFR Chittagong and is up by $10/t w-o-w.

No firm offers were received from Japanese suppliers, due to the upcoming Kanto scrap export tender scheduled on 9 February. Suppliers expect that the tender may conclude at a higher price as compared to January.

Fresh containerised offers for UK-origin shredded scrap are at $490-500/t CFR, moving up significantly by $30/t w-o-w.

Bangladesh, the third largest ferrous scrap importer in 2022, recorded 185,744 tonnes (t) of ferrous scrap imports m-o-m in January, 2023 from 186,151 t in December 2022, stood largely stable with a slight decline of 0.22% as per Customs data maintained with SteelMint.

Similarly, bulk scrap imports by the country fell by 19% y-o-y from 229,175 t in January, 2022. Bulk scrap imports dropped significantly due to the prolonged Letters of Credit (LCs) issues in the country.