Bangladesh: Subdued demand, currency depreciation weigh down imported scrap trade

Imported scrap offers to Bangladesh remained less with limited deals being concluded, despite prices continuing to be on the lower side. Moreover, sharp currency depreciations continued to weigh down imported scrap trade activities.

Taka devalues further against dollar: Imported scrap is more under pressure compared to exports, because finished steel sales are nor high. Currently, the Taka is being traded at 87.43 against the dollar which was seen at 86 levels a week back.

Recent deals and offers

• Fresh offers for UK-origin shredded are at $550/t CFR levels, down by over $30/t w-o-w.
  
  
• Around 1,000 t of UK-origin shredded is heard to have been booked at $540/t CFR Chittagong.
  
  
• UK-origin HMS is being quoted at $525-530/t CFR, registering a further sharp fall by around $30/t w-o-w.
  
  

"The monsoon season started and the country's construction activities will be stopped," said a steel producer. Many suppliers are quoting offers, but people are showing less interest, ultimately putting pressure on the supplier to lower their offers, he added.

Bulk scrap market awaits price direction

The country's bulk scrap buyers are waiting for further price direction. However, buyers managed to book a couple of US-origin bulk cargoes at lower offers last week. Meanwhile, Japanese H2 material is still out of the buyers' basket, due to disparity in bids and offers.

Indicative offers for US bulk HMS was last heard at around 530/t CFR levels, with limited offers available. Japanese H2 material is still on the higher side at $550/t CFR levels.

"The bulk market seems to have bottomed out and mills are trying to buy more cargoes at this level but sellers are not willing to sell at low levels," said a bulk scrap trader. Furthermore, most of the sellers sold out their material for June shipments. Fresh offers are yet to be quoted for July shipment, he added.

Rebar prices unchanged

The currency depreciation has impacted the domestic market, which is yet to improve. As per SteelMint assessment, major mills are offering rebar (10-16mm) at BDT 83,000-85,000/t($948-971/t) exw Chittagong, including taxes, slightly up by BDT 2,000/t ($22/t).

Currently, Dhaka-based mills are offering rebar at BDT 74,000-76,000/t ($845-868/t) exw, up further by BDT 2,000/t exw ($22/t) w-o-w.

Outlook: Imported scrap buyers are waiting for Turkish buyers to return for the next round of bookings to get clear market directions.