Demand for imported ferrous scrap in Bangladesh is improving however it was not very encouraging for sellers. Only a few mills running out of inventories booked imported ferrous scrap in containers, while most others focused on liquidating their finished steel inventories piled up during the national lockdown period.
Active bookings and bulk inquiries are halted and expected post-mid-September, believe participants.
Many construction projects which were on hold due to the COVID-19 situation and monsoon rains are likely to gain momentum in the coming days. Steel demand is likely to grow gradually in the next couple of months as construction companies kick start work in order to meet completion deadlines.
Ferrous scrap yards resisted lower bids from Bangladesh mills following mixed global cues, especially in China. Scrap prices are expected to stay firm at least for a month or beyond.
The daily Davis Index for containerized shredded, Thursday, was unchanged at $540/mt cfr Chattogram. Trades heard in small quantities, while bids still lagged by a gap of over $5-10/mt.
The daily Davis index for UK-origin containerized HMS 1&2 (80:20) settled unchanged at $501/mt, and the index for Australia-origin at $508/mt cfr Chattogram.
The daily index for US-origin containerized HMS 1&2 (80:20) dropped to $507.5/mt cfr Chattogram, up $1.25/mt from Wednesday. Most supplier remained unwilling to lower offers in the anticipation of a recovery in demand.
The daily Davis Index for HMS 1&2 (80:20) from Latin America rebounded by $3/mt to $498/mt cfr Chattogram. Traders in Brazil believe markets have bottomed out and prices should bounce back now. Traders who were away from exports for a while are returning following a decline in the domestic ferrous scrap prices.
Amid high offers for shipbreaking, domestic scrap supply has become tight. Shipbreaking plates 16mm offered at BDT56,500/mt ex yards while shipbreaking scrap equivalent to P&S was traded at below BDT51,000/mt ex yards.
High input costs forced mills to keep asking rates for finished steel firm even as they intend to liquidate inventories at the earliest. Overall steel demand is likely to lag expectations and the recovery could take longer than expected.
($1=BDT85.1)