Bangladesh: Imported ferrous scrap offers stable amid slow trade, LC issues

The imported scrap market in Bangladesh remains weak, with little activity in containerized materials. Indicative offers have stabilised, albeit following a modest uptick earlier in the week, and are now at $442/t.

Market participants are grappling with challenges related to LC (Letter of Credit) openings, prompting them to explore distant sources to address this issue. Demand has been sluggish, and LC-related problems persist.

Buyers exercise caution due to the unstable economic conditions and sluggish movements in the domestic market. However, transaction volumes have thinned, particularly when compared to last week.

Recent deals and offers:

• A deal of 1,000 t of Australian shredded scrap was done at $455/t CFR Chattogram.
  
  
• Offers for Australian HMS (80:20) were heard at $420/t CFR Chattogram.
  
  
• Hong Kong-origin PNS offers were heard at $460-465/t CFR Chattogram.
  
  
• UK-origin shredded offers were heard at $440-442/t CFR Chattogram.
  
  
• Offers for US-origin bulk scrap were assessed at $410-415/t CFR.
  
  
• Indicatives for Japanese-origin bulk H2 stood at around $410-412/t CFR.
  
  

Domestic market slow

The local market is down as per sources. Demand remains subdued in finished and semi-finished products due to slow activities while shipyard scrap prices remained stable at BDT 60,300/t currently($551/t). Chattogram rebar offers remained range-bound, ranging from BDT 94,000-96,000/t ($859-877/t), and Dhaka region rebar offers were heard at BDT 84,000-86,000/t ($768-786/t).

The Bangladeshi taka remains largely stable against the US dollar, trading at around 109.44 w-o-w.

In recent updates, Rear Admiral Mohammad Sohail, was appointed as the chairman of Chattogram Port Authority. He revealed that an estimated $5-7 billion in foreign investment is anticipated to flow into Chattogram Port within the next three years. This substantial investment outlook is contingent on the successful execution of the Bay Terminal and Matarbari Port Development initiatives in Maheshkhali upazila, Cox's Bazar district. The completion of these projects holds the potential to drastically amplify the current capacity of Chattogram Port.

Rod manufacturers and traders have noted that elevated prices persist due to ongoing high production costs driven by a strong dollar and reduced market demand for the product.

In the present market scenario, 75-grade MS rods are commanding prices ranging from BDT 96,000- 1,00,500/t, varying by brand. Specific prices include BSRM at BDT 1,00,500/t, Abul Khair Steel (AKS) at BDT 97,500/t, and KSRM along with GPH Ispat both at BDT 96,000/t. These prices have demonstrated relative stability over the past five months.

Outlook

Market sentiments are expected to remain subdued as a result of challenges related to LC openings. Offers might remain range-bound as market participants are not active currently for future bookings amid the bid-offer gap. A few containerised deals might be heard from Hong Kong and Australia as buyers are preferring these origins as the new alternatives to the UK and US.