Imported ferrous scrap trades in Bangladesh have remained paused amid the ongoing lockdown to curb the spread of the second wave of COVID-19 infections. Transport restrictions along with the suspension of international flights for eight days hampered business activities as demand came to a standstill. Labourers have also left for their hometowns with the start of the holy month of Ramadan on April 14.
Only a handful of suppliers offered material to Bangladesh and operations at mills has slowed with reduced working hours. No major movement in containers is expected before the end of April.
Few small-scale producers could shut factories to avoid losses as steel demand is expected to be under pressure till the Eid holidays, traders said. Monsoon season will begin soon after Eid, a time when construction activities take a backseat, so demand is expected to be tepid even then, traders noted.
The daily Davis Index for containerized shredded, Thursday, settled unchanged at $477.5/mt cfr Chattogram. UK-origin containerized shredded offers were at $480-485/mt cfr Chattogram on Thursday, with buyers staying away. Large mills have ample inventories and scheduled deliveries of ferrous scrap both, in containers and bulks. Medium-scale mills that are dependent on domestic scrap, rushed for shipbreaking scrap as tight supply pushed prices up.
The daily index for HMS 1&2 (80:20) from Latin America settled at $455/mt cfr Chattogram, down by $1/mt. Latin American yards continued to sell in their domestic market or have shifted their focus to the Indian market as bids from Bangladesh were unattractive.
Amid limited deals, the daily indexes for US-origin, UK-origin, and Australia-origin containerized HMS 1&2 (80:20) settled lower by $1/mt each to $460/mt, $451/mt, and $463/mt cfr Chattogram, respectively. There were very few deals for HMS 1&2 (80:20) at $460/mt cfr Chattogram early this week, but subsequently, bids have fallen to $450-455/mt cfr Chattogram.
Steel mills unable to lower prices
Domestic steel prices are expected to drop as the transportation challenges are impacting bookings. Construction demand has also cooled off amid the suspension of few projects. However, domestic ferrous scrap prices remained high. Offers for ship scrap equivalent to P&S were at BDT46,500-47,000/mt ex-yards, up BDT2,000/mt from the prior week. Domestic HMS 1&2 (80:20) offers were at BDT44,500-45,000/mt ex-yard Chattogram.
On Thursday, domestic billet offers were at BDT60,000/mt ex-works Chattogram. Prominent steelmakers kept rebar asking rates firm on increased imported scrap prices. Rebar prices were above BDT70,000/mt ex-works from large-scale manufactures while medium-scale makers offered rebar at BDT66,500-67,000/mt ex-works. BSRM held its base rebar asking rates at BDT71,000/mt ex-Chattogram, considerably higher than the rest of the market.