Demand for imported ferrous scrap in Chattogram is slowly improving. Few mills in Bangladesh resumed bookings to refill depleting scrap inventories, while most others focused on liquidating their finished steel inventories. As domestic sales of construction steel improve more imported ferrous scrap trades are expected in the coming days.
Taking cues from the global markets, buyers anticipate that raw materials prices are likely to be under pressure while finished steel prices could stabilize and rebound in the coming days.
Steel production in the country is on a gradual recovery after the nationwide lockdown was lifted. Steelmakers anticipate a healthy demand after the withdraw of the monsoon.
The daily Davis Index for containerized shredded, Wednesday, dropped by $1.25/mt to $540/mt cfr Chattogram. Trades in small quantities were heard at index prices while bids still lagged by a gap of over $5-10/mt. Offers for containerized UK origin shredded and P&S were at $540/mt cfr and $550/mt cfr Chattogram on Tuesday.
The daily Davis index for UK-origin containerised HMS 1&2 (80:20) settled at $501/mt, down $2/mt on Wednesday and the index for Australia-origin dropped to $508/mt cfr Chattogram, by $2/mt.
Amid high offers for shipbreaking, domestic scrap supply has become tight.
Buyers sought HMS from the UK to escape high freight charges for bulk cargoes from the US west coast, while Latin American yards remained affected due to tight vessel space.
The daily index for US-origin containerized HMS 1&2 (80:20) dropped to $506.25/mt cfr Chattogram, down $2.5/mt from Tuesday. Most supplier yards remained unwilling to lower offers in the anticipation of a recovery in demand.
Chinese steel prices have been successively recovering and market participants are hopeful of a recovery in Asian prices amid limited activities in Latin American and European markets.
The daily Davis Index for HMS 1&2 (80:20) from Latin America was unchanged at $495/mt cfr Chattogram. Traders in Brazil believe markets have bottomed out and prices should bounce back now.