Imported scrap offers remained firm in Bangladesh on global cues. Mills, however, limited their purchases as Monsoon has already arrived. Over the past few days, heavy rains in the country have impacted end-user consumption. Ferrous scrap buyers were in search of lower-priced material amid softening domestic billet and rebar prices.
A few mills offered discounts to encourage buying. Due to the approaching financial year-end, many mills are busy adjusting their books and looking to sell off steel inventories.
Driven by high offers despite lagging bids, the daily Davis Index for containerized shredded, Thursday, rose to $542.5/mt cfr Chattogram, up by $2.5/mt. Traders were unable to procure materials from suppliers at their targeted price levels. Offers for containerized shredded were in the range of $545-555/mt cfr Chattogram on Thursday.
For containerized P&S from Australia, offers were reported at $560/mt cfr Chattogram, but buyers were below $550/mt cfr Chattogram.
The government has announced a reduction in advance VAT on imported scrap in the budget for the upcoming year. The move could help stabilize cash flows for steel mills. Its impact on demand or prices, however, is unlikely.
In the bulk market, offers were very few as Turkey and South Korea were bidding higher. Offer indications were up by $5-10/mt to $535-540/mt cfr Chattogram with a rise in Turkish bulk prices.
The daily Davis Index for HMS 1&2 (80:20) from Latin America, Thursday, was up by $2/mt to $505/mt cfr Chattogram. Sellers were targeting prices above $510-512/mt cfr for #1 HMS from Latin America.
Indian sponge iron offers remained elevated for Bangladeshi mills. Offers for sponge iron which has a yield of around 79pc were above $460-465/mt cpt Benapole. Mills thus prefer HMS scrap over sponge for which the yield is above 90pc at $500-510/mt cfr Chattogram.
Offers for HMS 1&2 (80:20) from the UK were at $515-520/mt cfr Chattogram but mills’ counter bids were below $500/mt cfr. The index for US-origin containerized HMS 1&2 (80:20) rose by $1.57/mt to $516.07/mt cfr. The index for UK-origin HMS 1&2 (80:20) was at $511/mt cfr, while that for Australia-origin at $516/mt cfr Chattogram, both up by $3/mt on Thursday.
In the domestic market, ship scrap equivalent to P&S was flat at BDT46,000-46,500/mt ex-yards. Buying interest for domestic HMS 1&2 (80:20) was at BDT45,000-45,500/mt ex-yards Chattogram. Billet traded in the domestic market at BDT58,000-59,000/mt ex-works.