Bangladeshi mills’ appetite for imported ferrous scrap is gradually increasing. Despite the challenges of low finished steel demand and prices, the tight availability of imported ferrous scrap is forcing them to accept higher offers. Most mills, including large-scale steelmakers, are facing a margin squeeze.
But hopes of a robust recovery in steel demand as soon as the monsoon recedes, kept sentiments positive and steel productions rising.
Bids for imported shredded improved slightly as mills eye to refill scrap inventories. Some mills showed increasing interest to pay a premium over other subcontinental buyers. The daily Davis Index for containerized shredded, Monday, inched up by $1.25/mt to $541.25/mt cfr Chattogram.
The containerized freight rates from various supplier countries to Chattogram including New Zealand, Australia, Latin America and Africa rose to limit the buying options available for Bangladeshi mills. From Australia/New Zealand offers in containerized jumped on Monday with freight rates up by $300-500/mt per TEU basis, sources said.
In the bulk market, offers rebounded quickly by around $15/mt late last week. Elevated freight rates and sellers’ optimism of strong demand recovery after a couple of months of lull in Asia, drove prices up. For bulk HMS 1&2 (80:20) indications from the US WC were above $525/mt cfr Chattogram while bulk shredded was not less than $540/mt cfr, suppliers said. Offer-bid mismatch of over $20/mt will be normalised very soon, market participants believe.
The daily Davis Index for HMS 1&2 (80:20) from Latin America rose by $2/mt to $495/mt cfr Chattogram. Offers on Monday firmed up above $495-500/mt but no trades have materialised since the last two weeks, said traders.
The daily index for US-origin containerized HMS 1&2 (80:20) showed an uptick of $1.25/mt to $506.25/mt cfr Chattogram. Hurricane Ida has impacted the US ferrous scrap flows, however, it is not yet significant.
The indexes for UK-origin and Australia-origin HMS 1&2 (80:20) rose by $2/mt to $500/mt and $505/mt cfr Chattogram, respectively, on Monday. Offers were in the range $505-510/mt cfr Chattogram for containers on Monday.
Mills were purchasing domestic ship breaking and melting scrap for their immediate requirements to avoid delays in transshipment ports. Prices for ship scrap equivalent to P&S were unchanged at BDT51,000/mt ($600/mt) ex-yards. Rebar from large-scale mills traded at BDT72,000-72,500/mt ex-works.
Delivered domestic scrap vs rebar selling price spread fell below BDT21,500/mt ($253/mt) against the usual of above BDT26,000/mt ($305/mt). Shipbreaking P&S scrap on delivered basis is at BDT51,000/mt, while rebar prices are at below BDT72,500/mt ex-works.