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BANGLADESH: IMPORTED SCRAP MARKET SOFT AMID LIMITED INQUIRIES; BULK SCRAP OFFERS
RISE W-O-W

The Bangladesh imported ferrous scrap market experienced a slowdown
post-election, leading to reduced scrap offers with weak interests from the
buyer side. Shredded scrap prices from Europe were indicated at $435-438/t CFR
Chattogram, with HMS (80:20) reported at $415-418/t CFR.

Containerised shredded offers from Australia ranged from $432-436/t, and
Dubai-origin HMS was quoted at $422-425/t, with workable levels at $418-420/t.
As per few market sources, South American HMS (80:20) offers were heard at
$412-415/t, followed by $425/t for shredded scrap and $435/t for PNS scrap on
CFR Chattogram basis.
Furthermore, buyers showed a preference for non-European scrap, seeking closer
sources to reduce voyage time and avoid potential issues.

Bulk HMS offers from Australia rose $2-3/t to $428-430/t. US-origin bulk HMS
also rose by a similar amount to $430-432/t, but Japanese H2 was stable at
$426-428/t CFR Chattogram.

According to a trader, “The recent election caused a week of chaos in the
country, making small buyers hesitant to invest in the market due to weaker
forex.”

Another trader stated, “Heard few Middle East deals, but apart from that,
European offers were not heard.”

Bulk scrap import in CY’23: In CY’23, Bangladesh, the third-largest ferrous
scrap importer, experienced a significant 17% drop in overall bulk scrap
imports, reaching 3.16 million tonnes (mnt) compared to 3.80 mnt in CY’22. The
decline was attributed to challenges in LC opening and a weaker forex reserve.
Shipments from the US and Japan decreased during this period, while Turkish and
Indian bulk buyers capitalised on the favourable parity situation. In December,
Bangladesh’s total ferrous scrap import volumes reached 441,816 t, with 51% in
bulk and the rest in containers. Throughout CY’23, bulk volumes constituted 68%
of the total imported scrap volume, amounting to 3.16 mnt out of 4.67 mnt.

Domestic market:In terms of prices, rebar stands at BDT 86,000-88,000/t in
rolling mills, with major primary mills’ rebars priced at BDT 95,000-97,000/t
across grades. Ship-breaking scrap prices were reported at BDT 62,000-64,000/t,
busheling scraps at BDT 65,000/t, PNS scraps at BDT 62,000/t, HMS (90:10) at BDT
60,000/t, and HMS (80:20) at BDT 58,500-59,000/t.

As per industry reports, the ship-breaking industry in Bangladesh, a global
leader, faced a challenging year in CY’23, importing the lowest scrap ships in a
decade at 1,022,000 t. The ongoing dollar crisis and economic slowdown led to
reduced ship imports, impacting iron and steel production. Ship-breakers
struggled with letters of credit (LC) issues due to the dollar crisis, and the
central bank’s notification further hindered the industry.

The disparity between international and local scrap prices and shrinking ship
sizes added to concerns. More than 60% of re-rolling and steel mills have shut
down, affecting trading in scrap and steel plates. Entrepreneurs fear a
disastrous 2024, if the economic challenges persist. Abu Taher, president of the
Bangladesh Ship Breakers and Recyclers Association, expressed concerns about
paying workers and the future of the business.

Post-election update: The new Cabinet, led by Prime Minister Sheikh Hasina, will
be sworn in at Bangabhaban in Dhaka on Thursday evening. President Mohammed
Shahabuddin will administer the oath to the Cabinet members, and Cabinet
Secretary Md. Mahbub Hossain will conduct the ceremony at Durbar Hall. The
oath-taking ceremony is expected to have around one thousand guests, including
dignitaries. The 12th national parliamentary election on 7 January resulted in
the Bangladesh Awami League winning 222 seats, the Jatiya Party 11 seats, and
independent candidates securing 62 seats. Workers Party and Jatiya Samajtantrik
Dal, partners of the Awami League-led 14-party combine, each won one seat.

Forex status: Bangladesh’s foreign exchange reserves reached $20.38 billion,
with concerns about the sustainability of the recovery. The Bangladesh Bank sold
$6.7 billion to banks in the first six months of FY23-24. Reserve improvement to
$21.7 billion in December was aided by dollar purchases from Islamic banks.

After the national parliamentary election, the Dhaka Stock Exchange (DSE) index
rose by 25 points to 6,269. The market showed increased confidence, with
concerns lingering about the sustainability of the uptrend.

Outlook: Market insiders suggest that Bangladeshi buyers are hesitant to accept
such a significant price hike, although there is potential for prices to rebound
in the near term. The post-election period has instilled optimism among market
participants regarding potential stability in finished steel demand, thereby
fueling expectations for improved ferrous scrap demand in the near term.


--------------------------------------------------------------------------------

Posted

January 10, 2024

in

Melting Scrap

by

Anshuman

Tags:

Bangladesh: Imported scrap market soft amid limited inquiries; bulk scrap offers
rise w-o-w


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