Bangladesh: Scrap imports yet to pick up as buyers struggle with LC issues

Imported scrap trades still remain absent in Bangladesh, as per SteelMint assessment. This is the fourth consecutive month showing negative market sentiments due to LC opening restrictions. The country has witnessed a decline in its bulk scrap imports over the last two months.

Bangladesh's bulk ferrous scrap imports fell sharply by 24% to 186,151 t in December compared to 243,697 t in November, as per customs data. Venezuela was the top exporter at 35,155 t, followed by the Netherlands and Belgium at 34,536 t and 34,819 t, respectively. Bulk scrap imports by the country increased by 53% y-o-y to 3.80 mnt in 2022.

Furthermore, the country imported approximately 247,000 t of scrap, including bulk and in containers, in December, a decrease of 26% from the previous month compared to 336,000 t in November.

Market participants are hopeful that trade activities are likely to resume in the second half of January. Demand from steelmakers is high and the supply situation is not good, as banks are not giving permission for LC opening.

"Demand is there, but supply cannot be met because banks are not permitting LC openings. Only if a buyer can arrange USD is LC being provided," a source informed.

Nevertheless, offers from the US and UK/European countries have increased further. Market activities are yet to resume after the holidays, though.

Fresh containerised offers for UK-origin shredded scrap are at $470/t CFR, up by $10/t w-o-w. However, no deals were reported.

Bulk prices trend up

Taking into account the first Turkish deal at the start of the New Year, prices are trending higher. A Mediterranean region-based steel mill has booked a European bulk cargo of 30,000 t HMS (80:20), 5,000 t shredded, 5,000 t P&S and HMS 1 scrap at an average price of $402/t CFR Turkiye, SteelMint learnt.

Indicative bulk offers to Bangladesh for US-origin HMS are at $450/t CFR levels, up significantly by $15-20/t w-o-w after the Turkish deal.

No firm offers were received for Japanese material.

Domestic market remains subdued

Domestic scrap prices in Bangladesh are high, but rebar prices are not increasing. Due to the low scrap collection rate in winter because of snowfall, overseas scrap prices are high. Thus, domestic traders have kept scrap prices high due to scarcity of material. Currently, local scrap is being traded at BDT 64,000/t ex-yard, up 1,500-2,000/t w-o-w.

SteelMint assessed domestic rebar prices at BDT 91,000-94,000/t ($859-887/t) exw-Chittagong. Dhaka-based mills have kept their rebar offers unchanged for the sixth successive week at BDT 85,000/t ($802/t).