Steel mills in Bangladesh resumed trades for imported scrap as the Eid holidays have ended. Bids on Wednesday were lagging behind the supplier’s expectations. Steel demand could take longer to recover amid extended lockdowns, limited cash flows due to declined margins and the impending arrival of Monsoon.
Logistical issues and high freight rates kept buying interest low and most mills purchased material only on a need basis. A few traders with better liquidity availability have resumed trading. Buying interest in India and Pakistan remains low.
Rebar sales were slow with large steelmakers announcing a price hike following high input costs. After returning from Eid holidays, large-scale steelmakers have hiked rebar prices by BDT1,500-2,000/mt ($18-24/mt) to BDT72,500-73,500/mt ex-works.
The daily Davis Index for containerized shredded, Wednesday, settled at $543/mt cfr Chattogram, down by $2/mt from Tuesday. Despite firm offers for containerized shredded from UK/EU-yards at $550-555/mt cfr Chattogram, buyers were unwilling to accept above $543/mt and $545/mt cfr Chattogram.
The daily index for HMS 1&2 (80:20) from Latin America settled at $508/mt cfr Chattogram, down by $3/mt from Tuesday. Most Latin American yards kept offers firm amid active domestic demand. Mills’ bids were only in the range of $500-505/mt cfr Chattogram.
It is expected that with drop-in active cases of COVID-19, lockdown restrictions could be eased after May 23 and support buying sentiments.
For ship scrap equivalent to P&S, asking rates were at BDT47,500-48,000/mt ex-yards on Tuesday. Mills were interested in domestic melting scrap at BDT46,000-46,500/mt ex-yard Chattogram. Mills are likely to gradually accept elevated prices despite sluggish steel sales as supply remains tight.
Trades for HMS were limited on Wednesday amid high offers. The indexes for US-origin, UK-origin, and Australia-origin containerized HMS 1&2 (80:20), Wednesday, settled at $517.5/mt, $515/mt, and $522/mt cfr Chattogram. Depending on origins, trades for containerized HMS 1&2 (80:20) were reported at $515-520/mt cfr Chattogram.
For the next two weeks, restocking of ferrous scrap could pick up amid low inventories ahead of the rainy season. Yards are interested in catering to bulk inquiries due to a shortage of empty containers, believe traders.