Bangladesh: Higher bulk scrap prices lead to 13% m-o-m fall in June imports

Bangladesh, a major bulk ferrous scrap buyer from South Asia,  recorded imports of the material at 111,140 tonnes (t) in Jun'21 against 127,723 t seen in May'21. Imports declined by 13% m-o-m, as per vessel line-up data available with SteelMint.

High prices of bulk scrap prompted buyers to prefer containerised scrap. In addition, Eid holidays in May kept import bookings on the lower side owing to limited scrap and finished steel trade during the period.

Out of the five bulk vessels that arrived in Jun'21, Australia was the largest exporter with 30,360 t of ferrous scrap in Jun’21. The US was the second largest exporter with 30,003 t followed by Japan with 22,000 t.

Volatility in freight rates impacted Bangladesh's bulk scrap purchases from Japan. Bulk scrap offers from the US were around $530-540/t CFR Chittagong levels but bulk H2 offers from Japan were at $610/t CFR Chittagong in Jun'21, including freight rates, turning Bangladesh mills away from booking Japanese bulk.

Mills raise rebar offers: Major steel mills in Bangladesh increased rebar offers due to high production costs. The monthly average price of rebar stood at BDT 72,375/t in May'21 vis-a-vis BDT 71,000/t in Apr'21.

Outlook
Imported bulk scrap buyers are likely to turn active in Aug on increased restocking needs ahead of the monsoon. However, finished steel demand is expected to remain on the lower side from Jul'21 with the onset of monsoon.

SteelMint had reported confirmed bulk bookings of around 5-6 cargoes of shredded from the US concluded in the third week of Jun'21 for Jul'21 shipments in the range of $535-540/t CFR Chittagong.