Bangladesh steel mills resumed activities post Eid holidays. As expected, large steelmakers have announced a price hike for rebar following high input costs. This has boosted ferrous scrap market sentiment as traders turned active to restock amid renewed demand and comparatively slow buying from India and Pakistan.
A large number of mills may remain away from the market for another week. Amid extended COVID-19-related lockdown until May 23, trading is less likely to gain momentum.
Large scale steelmakers including BSRM, AKS and GPH hiked rebar price by BDT1,500-2,000/mt ($18-24/mt) to BDT72,500-73,500/mt ex-works on Tuesday. Mills are expecting the uptrend to continue amid high ferrous scrap offers. Before Eid rebar was traded in the range of BDT71,000-71,500/mt ex-works. Medium-scale mills are still facing margin squeeze as they are only able to sell at BDT66,500-68,000/mt ex-works despite higher scrap prices.
As trades resumed post-Eid holidays, the daily Davis Index for containerized shredded, Tuesday, rose to $545/mt cfr Chattogram, up by $2.5/mt from Monday on higher offers. A few trades heard for containerized shredded from UK/EU-yards. Offers rose to $550-555/mt cfr Chattogram.
The daily index for HMS 1&2 (80:20) from Latin America settled at $511/mt cfr Chattogram, up by $1/mt from Monday. Most Latin American yards kept offers firm amid active domestic demand. Increased freight and delays in deliveries of shipments due to reduced collections at yards impacted trading.
Many shipbreaking yards remained shut due to the diversion of liquid oxygen for medical use and labour shortages. For ship scrap equivalent to P&S, asking rates were at BDT47,500-48,000/mt ex-yards on Tuesday. Mills were interested in domestic melting scrap at BDT46,000-46,500/mt ex-yard Chattogram. Amid limited scrap inventories, sellers refused to lower offers, and mills are gradually accepting elevated prices despite sluggish steel sales and monsoon arrival expected in a couple of weeks.
Bids for HMS scrap lagged by over $10/mt against offers, thus limiting deals. The indexes for US-origin, UK-origin, and Australia-origin containerized HMS 1&2 (80:20), Tuesday, settled at $520/mt, $515/mt, and $522/mt cfr Chattogram. Offers continued to move up on short supply. Traders sold HMS 1&2 (80:20) in containers upto $515/mt cfr Chattogram pushing offers on Tuesday in the range of $520-525/mt cfr Chattogram.
For the next two weeks, there could be restocking of ferrous scrap amid low inventories ahead of the rainy season. Yards are interested in catering to bulk inquiries due to a shortage of empty containers.