Bangladeshi steel mills slowed purchases on Friday as offers surged in a short span. A few buyers continued bookings, albeit, on a need basis. Post freight hikes this week, most buyers increased bids to secure material. Landed cost moved up by a minimum of $20-25/mt.
A sharp spike in COVID-19 cases has alarmed many mills and dampened sentiments in Bangladesh, which was the second most active scrap buyer in South Asia this week.
The daily Davis Index for containerized shredded, Friday, settled at $468.75/mt cfr Chattogram, up by $3.04/mt. The index rose by $13.25/mt from the prior week. Thin volume trades for UK-origin containerized shredded reported at $465-470/mt cfr Chattogram, while offers rose to $470-475/mt cfr on Friday.
Another factor driving scrap prices is a sharp rise in Indian Sponge iron export offers, which remained high on tight supply and active domestic demand. Indian Sponge iron export offers rose to $415-420/mt cpt Benapole or over $425-430/mt cfr Chattogram driving steel mills to focus on the imported scrap market.
The daily index for HMS 1&2 (80:20) from Latin America settled at $453/mt cfr Chattogram, up $6/mt. From prior Friday index jumped by $17/mt. Offers increased to $455-460/mt cfr Chattogram in the latter half of the week following improved demand. Indices for US-origin, UK-origin and Australia-origin containerized HMS 1&2 (80:20) settled at $458/mt, $447/mt and $457/mt cfr Chattogram, respectively, up $15-20/mt from last Friday.
In bulk, offers for mixed cargo from the US West Coast reported at $475-480/mt cfr Chattogram while full shredded was around $480-485/mt cfr Chattogram. Japanese suppliers, too, held offers high amid a $10-15/mt jump in freight rates for all seaborne destinations including Bangladesh.
Trades for premium scrap grades like P&S and Busheling were thin on limited offers. UK-origin busheling in containers offered at $495-500/mt cfr Chattogram on the possibility of tightening industrial generation due to shutdown of auto plants. The Davis indexes for P&S and #1 busheling, Friday, settled at $481/mt and $494/mt, up by $17/mt and $20/mt, respectively, from the prior week.
Domestic steel prices pause price rally
On Friday, domestic steel prices in Bangladesh paused their rally leading to a BDT1,000/mt drop in scrap prices. Higher steel prices met resistance as many end-users expect slow demand during Ramadan and monsoons.
Amid stable supply from ship recyclers, the weekly index for ship scrap equivalent to P&S inched up by BDT500/mt to BDT44,250/mt ex-works. Prices adjusted after hitting BDT45,000/mt ex-works early in the week. The index for domestic HMS 1&2 (80:20) rose by BDT750/mt to BDT43,750/mt ex-yard Chattogram.
Domestic billet prices dropped marginally to encourage trades and traders liquidated stocks at BDT54,300-54,700/mt ex-works Chattogram, with the index down BDT875/mt from a week earlier. Southeast Asian billet offers rose above $640-650/mt cfr amid high freight charges.
Most participants indicate prices could start falling from mid-April and drop by at least BDT5,000/mt. On higher imported scrap prices, large steelmakers held rebar asking rates at higher levels. BSRM, AKS, GPH, and KSRM raised their asking rates for rebar to BDT70,500/mt, BDT68,000/mt, BDT68,500/mt, and BDT68,500/mt, respectively.
The index for large steelmakers’ rebar, Friday, increased by BDT1,375/mt to BDT69,125/mt ex-works. Large mills cancelled discounts amid recovering demand. The index for rebar from medium-scale mills in Dhaka was up by BDT500/mt to BDT64,250/mt ex-works. Small-scale mills sold rebar in the range BDT58,000-58,500/mt ex-works.
On Friday, 16mm ship plate dropped to BDT54,000/mt ex-yards while imported scrapped vessels prices remained at $490-500/ldt cfr Chattogram.