Bangladeshi steel mills are in urgent need of imported ferrous scrap amid low inventory and tight domestic scrap supply, however, most mills backed out from buying materials at record high prices. Although ferrous scrap prices are yet to show significant correction in the global market, mills plan to wait until prices cool-off. Most mills bids $10-20/mt below current offers. Despite rising inquiries, no deals heard.
The daily Davis Index for containerized shredded, Wednesday, settled at $476.25/mt cfr Chattogram, up by $1.25/mt from Tuesday. Australian mixed P&S and shredded in containers sold at $470/mt cfr Chattogram on Wednesday. Most recyclers in the US, Europe and Australia would remain shut on account of the New Year holidays till Jan 4. Traders with stocks in hand are keen to sell-off before prices lose steam in the coming days amid slowing Chinese demand.
The Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $463.21/mt cfr Chattogram, down by $1.08/mt from Tuesday. US suppliers are anticipating strong domestic demand in January and yard owners are hesitant in offering any material now.
On Wednesday, HMS 1&2 (80:20) from Chile traded at $457/mt cfr Chattogram. The daily index for Latin America-origin HMS 1&2 (80:20) Wednesday was flat at $463/mt cfr Chattogram. Offers for mix HMS #1 and P&S were limited while bids were around $450-455/mt cfr Chattogram.
Tight supply of domestic scrap and active demand supported higher scrap prices in the local market. Ship scrap equivalent to P&S rose to trade at BDT42,000-42,500/mt ex-works. Domestic HMS 1&2 (80:20) was offered at above BDT40,500-41,000/mt ex-yards Chattogram. Billet prices were flat at BDT51,000-52,000/mt ($601-612/mt) ex-works Chattogram.
Large-scale rebar makers are attempting to raise offers to pass-on higher input costs. Prices for rebar heard at BDT63,000-65,000/mt ex-works. On Wednesday, BSRM and AKS Steel offered rebar at BDT66,000/mt and BDT65,000/mt ex-works, up BDT1,000/mt from Monday. Large mills are targeting rebar prices at around BDT70,000/mt ex-works to maintain the spreads between scrap and rebar. Offers would soon reach those levels, if demand improves. But there is a strong resistance by infrastructure contractors to book rebar above BDT60,000/mt.
In the shipbreaking market, despite rising vessel supply, yards are yet to increase booking volumes. Shipbreakers are expected to be active soon as they are short on inventory.