Bangladesh's imported scrap market subdued amid rising power costs, cautious buying

• Higher electricity tariffs add pressure on mills
  
  
• Domestic scrap strength supports import sentiment
  
  

Bangladesh's imported ferrous scrap market continued to face headwinds during the week ended 17 June, as weak steel demand and elevated production costs constrained mill purchasing activity. Uncertainty over import duty revisions proposed in the national budget further dampened sentiment. Despite a modest increase in domestic scrap prices, most buyers stayed on the sidelines, preferring to delay bookings in anticipation of softer imported scrap offers.

BigMint's weekly assessments, CFR Chattogram

• European-origin containerised HMS (80:20): $378/t down $4/t w-o-w
  
  
• European-origin containerised shredded: $409/t, down by $9/t w-o-w
  
  
• Japanese-origin bulk H2: $398/t, down by $5/t w-o-w
  
  
• US-origin bulk HMS (80:20): $405/t, down by $5/t w-o-w
  
  

UK-origin shredded scrap was heard at $405-410/t CFR Chattogram, while Australian-origin shredded offers remained above $400/t CFR. HMS 80:20 offers were heard around $380/t CFR, with US-origin containerised HMS 80:20 indicated at $375-380/t CFR.

Buyers continued to resist higher prices, targeting levels below $400/t CFR for shredded scrap and below $375/t CFR for HMS, particularly for Brazilian and other deep-sea origins. Market participants noted that buyers were expecting HMS offers to soften further, although HMS 90:10 grade was still indicated at $380-385/t CFR.

Several transactions were reported during the week. Around 5,000 t of Singapore and Malaysia-origin PNS was booked at $420/t CFR Chattogram, while 2,000 t of Australian-origin shredded scrap was sold at $410/t CFR. Australia and New Zealand-origin HMS 90:10 was reported sold at $387-390/t CFR for 1,500-2,000 t cargoes.

Additional deals included 1,000 t of Philippines-origin GI bundles at $340/t CFR, Malaysia-origin GI bundles at $345/t CFR, and Brazil-origin HMS at $370-372/t CFR Chattogram.

Market comments

A Dhaka-based trader said, "Buyers remain cautious around the $400/t CFR level as many expect some correction, although stronger domestic scrap prices could provide support."

Another Chattogram trader noted, "Electricity tariff increases are adding pressure on steelmakers' operating costs, but the impact on scrap procurement has remained limited so far."

Domestic market

Domestic market conditions showed some improvement during the week. Local scrap prices remain range-bound at around BDT 51,000-55,000/t ($415-448/t), providing support to mill procurement sentiment. Rebar prices were heard at BDT 85,000-86,000/t ($692-700/t) ex-Dhaka and BDT 90,000-92,000/t ($733-749/t) ex-Chattogram.

The recently announced budget proposed higher import duties on several steel products, including a 10% regulatory duty on cold-rolled coils and sheets, aimed at supporting domestic manufacturers. Meanwhile, rising electricity tariffs, reportedly increasing by up to 33%, added further pressure on steelmakers' operating margins.

Despite higher electricity tariffs and weak regional steel demand, mills largely maintained finished steel prices, helping support overall market stability.

Outlook

Bangladesh's imported scrap market is expected to remain range-bound in the coming days. While higher electricity costs and cautious steel demand may continue to limit aggressive buying, firmer domestic scrap prices and stable finished steel values could provide support to import prices. Market participants will closely monitor freight movements and post-budget market developments for clearer direction.