Bangladesh: Imported ferrous scrap offers drop by up to $6/t w-o-w; improved LC keeps buyer active

• Bulk scrap bookings continue, fulfilling larger mills' requirements.
  
  
• LC issuance has slightly eased, leading to more containerised scrap bookings.
  
  

In Bangladesh, the imported ferrous scrap market witnessed a moderate pace in terms of fresh bookings. Major steelmakers revised their rebar prices owing to a weak finished steel demand observed in the market. Containerised shredded scrap prices from the UK and Europe dropped by $4-5/tonne (t) w-o-w to $422-423/t, while HMS (80:20) offers also declined to $402-404/t CFR Chattogram.

Approximately 6,500-7,000 t of containerised deals were closed over the last seven days involving various grades and origins, such as Malaysia, Chile, the Philippines, Canada, and Australia.

BigMint's assessment for Europe-origin shredded scrap (containers) decreased by $4/t to $422/t, while HMS (80:20) containers were down by $6/t w-o-w to $402/t.

As per market participants, bulk offers in HMS were heard at 405/t from the US, yet workable levels from buyers were heard to be around $398-400/t and Singapore bulk HMS was heard at 405-408/t CFR Chattogram.

A leading trading house reported that several buyers who placed orders in January are just now receiving their shipments, due to delays in letters of credit (LC) approvals a few months back.

BigMint's weekly assessment for US-origin HMS (80:20) bulk scrap prices witnessed a $2/t drop w-o-w to $498/t CFR Chattogram.

Japanese H2 scrap offers were in the range of $390-394/t, while buyer inquiries were at around $388-389/t CFR.

BigMint's weekly assessment for Japan-origin H2 bulk scrap prices witnessed a $4/t drop w-o-w to $391/t CFR Chattogram.

As per a market insider, a bulk vessel was booked from the US comprising 13,000 t of HMS (90:10) at $403/t with 14,000 t of PNS at $414/t on a CFR Chattogram basis.

A major steel mill representative said, "The market is stable and we heard a few bulk scrap offers only. The LC situation has improved slightly, and the steel market remains steady. However, there's no news of new projects as of now."

Recent deals:

• Around 500 t Australia-origin shredded were booked at $425/t on a CFR Chattogram basis.
  
  
• Approximately 500 t GI bundle press from the Philippines were booked at $398/t on a CFR Chattogram basis.
  
  
• Around 500 t of Malaysia-origin HMS- bundle were booked at $405/t on a CFR Chattogram basis.
  
  
• A parcel of 500 t shredded from Malaysia were sold at $430/t on a CFR Chattogram basis.
  
  
• Around 500 t of HMS 1 from Canada were booked at $405/t on a CFR Chattogram basis.
  
  
• Approximately 500t of Malaysia-origin PNS scrap were booked at $430/t on a CFR Chattogram basis.
  
  
• Around 3,000 t of HMS(90:10) from Chile were booked at $390/t on a CFR Chattogram basis.
  
  
• Around 1,000 t shredded from Australia were booked at $402/t on a CFR Chattogram basis.
  
  

Domestic market: In the local market, rebar prices stood at BDT 85,000-88,000/t (equivalent to $774-801/t) exw-Dhaka, and BDT 91,000-92,500/t (equivalent to $828-842/t) ex-Chattogram. Billets are at BDT 76,000-77,000/t (equivalent to $692-701) exw. Ship-breaking scrap prices locally are between BDT 60,500-61,500/t (equivalent to $551-560/t).

Upcoming budget: The fiscal year 2024-25 budget is being prepared amid challenges, including global economic instability, rising domestic and foreign debt, and International Monetary Fund reform demands. Finance Minister Abul Hasan Mahmood Ali will present the budget, estimated at BDT 7,96,900 crore, on 6 June, aiming to minimise unnecessary expenditures while focusing on revenue growth.

The budget targets a revenue collection of BDT 5,31,900 crore and a deficit of BDT 2,65,000 crore. Key strategies to combat inflation include controlling bank loan interest rates, discouraging unnecessary imports, reducing money supply, and cutting subsidies. The budget emphasises social security, agriculture, and food supply, with a 7.5% inflation target.

Despite constraints, the government aims for a people-friendly budget, enhancing revenue management through expanded VAT and the new Income Tax Act.

Outlook: In the short term, imported scrap prices are expected to stay within a narrow range. A lower scrap collection rate from suppliers could influence near-term offers, but buyers may continue negotiating to keep prices at accessible levels.