Bangladesh: Imported scrap offers stable w-o-w amid limited activities and upcoming election

In Bangladesh, imported ferrous scrap offers have held steady this week, marked by nominal bookings and subdued activities. European suppliers have been notably inactive, grappling with winter conditions and facing shipping challenges across key regions.

The overall imported market remained stagnant, contributing to a subdued market scenario, further compounded by the upcoming elections in January.

Specifically, containerised shredded scrap offers from Europe were reported in the range of $432-435/t CFR Chattogram, while HMS (80:20) was offered at $410-415/t CFR.

A trader commented on the current situation, noting, "Due to the year-end, there is currently a lack of buying inquiries. From the UK, major offers are scarce due to freight issues and December closings."

Bulk offers from Australia to Bangladesh, specifically for HMS, were at $425/t. Meanwhile, containerised shredded offers from Australia are in the range of $430-435/t, while Malaysian PNS was being offered at around $430/t. Dubai-origin HMS is quoted at $420/t, with workable levels at $415/t. In bulk, the market remains stable, particularly for HMS US West Coast at $430/t, shredded at $435/t, and bonus at $440/t. Japanese H2 offers have seen a slight increase, now standing at $422-425/t, up from the previous week.

According to SteelMint's vessel lineup data, the bulk carrier "MV Pacific Wave" is loading metal scrap from Redwood City, USA, with the intended destination being Bangladesh. Anticipated to dock at the Bangladeshi port in mid-January, the specific buyer for the transported scrap is yet to be confirmed.

Recent deals

• Around 500 t of PNS from Hong Kong was sold at $445/t on a CFR Chattogram basis.
  
  
• Approximately 500t of PNS scrap was from Hong Kong sold at $450/t on a CFR Chattogram basis.
  
  
• Approximately 2,000 t of Australian HMS (80:20) scraps were booked at $410/t CFR Chattogram.
  
  
• Around 1,500 t of HMS bundle scraps from Hong Kong were sold at $410/t CFR Chattogram.
  
  

Domestic market: The market is currently experiencing a subdued atmosphere as the upcoming January elections contribute to a prevailing sense of quietness. In terms of prices, rebar stands at BDT 84,000-88,000/t in rolling mills, with major primary mill's rebar varieties priced at BDT 92,000-96,000/t. Scrap quality PNS is at BDT 62,000-64,000/t, while HMS quality (80:20) is at 59,000-60,000/t, and shipbreaking plate (22mm) is priced at BDT 74,000-75,000/t. Shipbreaking scrap follows at BDT 65,000-66,000/t, seeing a slight increase attributed to the limited arrival of ships.

Banking Sector: The banking sector in Bangladesh is witnessing a surge in demand for liquid funds, driven by increased lending to the government and the removal of the interest rate ceiling. Banks facing liquidity challenges are offering high-interest deposits, with some providing up to 13.40% interest. Notably, Padma Bank Ltd. accepts term deposits at a 10% rate, while national bank offers interest up to 13.40% in its Special Savings Scheme. Despite the attractive rates, many people prioritise the assurance of timely deposit returns over the interest rate, particularly wary of distressed banks facing higher risks. Bangladesh Bank data reveals a decrease in cash outside the banks, signalling a return of funds to the banking system. The call money rate for loans has also risen, reaching 9.16%, the highest since 2012, as banks grapple with year-end liquidity pressures.

Election update: The Home Ministry requested an extra BDT 1,400 crore for law enforcement in the revised budget. This is due to increased demands from inflation, upcoming elections, and deployment for political unrest. Specifically, BDT 1,030 crore is requested for the police, BDT 25.70 crore for RAB, and BDT 86.60 crore for BGB. An extra BDT 106 crore is sought for BGB and Ansar members. Additional funds are also sought for fuel, equipment, and awards. The Finance Ministry is considering the requests and may provide some additional allocation, but not the full amount.

Outlook: Bangladesh's imported scrap market is expected to face a near-term lull before the elections, but optimism prevails for a January rebound. As suppliers return from the holidays and buyers prepare for the next production cycle, activity is expected to pick up in mid-January.