Bangladesh's import scrap market has ground to a near standstill over the past week, as difficulties opening letters of credit have effectively halted fresh purchasing activity. Steelmakers have consequently turned mainly to domestic scrap, while local scrap and rebar prices have declined in response to weak finished steel demand. Import offers, meanwhile, have followed a mixed trend: European indications have moved lower, whereas selected Australian and Singapore origin higher-grade offers have risen compared with last week despite the lack of active buying. SteelOrbis learned from trade and industry circles on Thursday, August 6, that overall market sentiment has become more cautious compared with the previous week.
More specifically, ex-EU shredded scrap in containers have been indicated at $395/mt CFR Chattogram this week, down from $400/mt CFR Chattogram last week, while ex-EU HMS I/II 80:20 scrap in containers have been indicated at $363/mt CFR Chattogram, down from $370/mt CFR Chattogram in the previous week. No fresh bookings for European material have been heard, as letter of credit (LC) constraints have kept most mills out of negotiations.
As for ex-Australia material, 5,000 mt of shredded scrap have been offered at $410/mt CFR Chattogram for mid-August and September loading, up by $10/mt from the $400/mt CFR Chattogram offer level reported last week. Meanwhile, ex-Australia/New Zealand HMS I/II 90:10 scrap has been offered at $375/mt CFR Chattogram.
In terms of other origins, 3,000 mt of ex-Singapore PNS scrap have been offered at $420/mt CFR Chattogram, up by $10/mt from the $410/mt CFR Chattogram offer reported last week. In addition, 3,000 mt of Malaysian origin PNS grade scrap, mixed with some HMS I material and offered on a no-quality-claim basis, have been indicated at $410/mt CFR Chattogram. 5,000 mt of Singapore/Malaysian origin HMS bundles have been offered at $375/mt CFR Chattogram, while 5,000 mt of busheling scrap have been indicated at $425/mt CFR Chattogram.
As for ex-Japan material, unconfirmed market indications have placed H2 scrap in bulk at $380-385/mt CFR Chattogram this week, compared to offers at $395-400/mt CFR Chattogram reported last week. Meanwhile, HS scrap is reported to be available at $415-420/mt CFR Chattogram, versus $425/mt CFR Chattogram in the previous week. However, no confirmation of firm offers or concluded transactions has been received from Bangladeshi market sources at the time of writing.
Buyers have continued to show little interest in these levels, considering Japanese material uncompetitive compared with cargoes from alternative deep sea origins. This weaker interest was also reflected in trade flows, with Japanese scrap exports to Bangladesh falling by almost 49 percent month on month to 95,518 mt in June, from 185,357 mt in May. According to market sources, Bangladeshi mills had shifted their purchasing focus towards ex-US- and ex-Australia deep sea cargoes following two reported bulk bookings, consequently reducing demand for Japanese material.
Meanwhile, Bangladesh's domestic steel market has remained under pressure, with local scrap prices moving lower, while rebar prices in Chattogram have remained broadly stable. Difficulties opening LCs have prevented mills from securing fresh imported cargoes, leading them to rely largely on domestic scrap. According to a local source, domestic scrap has been available at around $6-7/mt below comparable imported material. “Due to the LC and banking issues, mills are currently unable to import scrap and are relying almost entirely on domestic material,” a Bangladesh trader told SteelOrbis.
According to local sources, local scrap prices have been reported at BDT 48,000-50,000/mt ($388-404/mt) ex-warehouse, down from BDT 52,000-53,000/mt ($422-430/mt) recorded on July 9. Meanwhile, rebar prices in Chattogram have been heard at BDT 90,000/mt ($727/mt) ex-works, remaining at the upper end of the BDT 80,000-90,000/mt range heard at that time.
$1 = BDT 123.79
