Bangladesh: Rising imported scrap pricing concerns plague steel mills

A fresh hike in the recent Turkish imported scrap deal kept global scrap prices at a higher level. Bangladesh based scrap buyers are hesitant to book new scrap cargoes, as the disparity between suppliers’ offers and buyers’ bids has widened further this week. To make matters worse, increased freight charges kept buyers on wait and watch mood. Globally the steelmakers are struggling with the problem as ultimately they have to pay for it despite the obstructive finished market.

To add to the gloom, Bangladesh based buyers are scared of China’s comeback into the imported scrap market. They are apprehensive that this would result in scrap prices rising to a higher level. Due to China’s proximity to Japan, buyers from Bangladesh may find it hard to book bulk cargoes at desired rates, SteelMint learnt.

A prominent Bangladesh-based steel mill has booked a bulk scrap cargo of 20,000 t from Australia late last week, sources have reported to SteelMint. The cargo comprises HMS 1&2 (80:20) at $410/t, shredded at $425, and PNS at $430/t CFR Chittagong basis.

SteelMint’s assessment for bulk Japanese H2 stands at $450/t level, however, fresh deals have not been reported this week. Whereas, USA origin suppliers have quoted bulk offers at $465/t level, with bids heard at $430-440/t CFR Chittagong basis.

Recent containerized deals and offers-

• SteelMint's assessment for containerized shredded stands at $438/t CFR Chittagong level, up by $13 on a weekly basis.
  
  
• In a recent deal, a Bangladesh based trader has sold Singapore origin PNS at $433/t CFR and Chile origin HMS 1 in a 40ft container at $418/t CFR Chittagong basis containing 1,000 t and 2,000 t respectively.
  
  
• Towards the closing of last week, numerous deals were concluded, including around 5,000 t of UK origin PNS at $420/t and 1,000 t of Australian shredded at $420/t CFR Chittagong basis.
  
  
• HMS 1&2 (80:20), suppliers are quoting around $430/t basis, registering a sharp increase by $30-35 w-o-w.
  
  
• UK/EU origin PNS offers are at $ 440-445/t level, up by $10/t on a weekly basis.
  
  

Indian sponge iron export prices increase further - Sponge iron export prices have increased this week by $10/t in recent deals of about 15,000 t to Bangladesh. The deals have been recorded at $380-385/t CPT Benapole (equivalent to $395-400/t CFR Chittagong, Bangladesh). Sources believe that prices may remain strong on the back of strengthening raw materials & substitute product prices.

Domestic rebar prices in Bangladesh fall slightly �" Rebar prices of major steel mills have come down at an average price of BDT 60,000- 61,000/t exw Chittagong levels, down by BDT 1,000-2,000/t w-o-w. Rebar offers from the secondary mills are trading at BDT 54,000/t level in Dhaka region.