Mills in Bangladesh continued to ramp up steel productions but steel sales in the retail markets were subdued due to the usual monsoon lull. After paying record-high prices for bulk ferrous scrap in pre-monsoon bookings, profit margins for large-scale mills are tight as they are unable to raise finished steel prices amid weak demand. This has weighed down their bids for imported ferrous scrap.
Despite low demand, a potential $5-15/mt hike in containerized freight rates could push offers to Bangladesh up, especially from the US west coast suppliers. Only a few mills with low inventories bought scrap to fulfil their immediate requirements.
Following small quantity deals for shredded at slightly higher prices, the daily Davis Index for containerized shredded, Friday, inched up by $2.5/mt to $540/mt cfr Chattogram. The index recovered by $2.5/mt from Aug 27.
Many construction projects are on hold due to the COVID-19 situation and monsoon rains. Post mid-September steel demand is expected to gain momentum and could drive restocking of imported ferrous by mills.
In the bulk market, despite reduced prices in Turkey, supplier yards resisted lower bids from Bangladesh. Mills resumed inquiries for bulk cargoes over containers amid tight supply but remained unwilling to make purchases due to an offer-bid mismatch of over $20-25/mt.
The daily Davis Index for HMS 1&2 (80:20) from Latin America was unchanged at $493/mt cfr Chattogram. Offers were firm above $495/mt but buyers targeted bids lower by $10/mt for HMS grades.
The daily index for US-origin containerized HMS 1&2 (80:20) remained unchanged at $505/mt cfr Chattogram but up $1/mt from Aug 27 on elevated freight.
The indexes for UK-origin and Australia-origin HMS 1&2 (80:20) declined to $498/mt and $503/mt cfr Chattogram, respectively, unchanged from Thursday but down $2/mt from Aug 27. For #1 HMS of UK origin containerized trades were at $510/mt cfr.
From prior Friday, the Davis Index for P&S 5ft inched up by $2/mt to settle at $545/mt cfr, while the index for #1 busheling was at $560/mt cfr Chattogram. Deals for the UAE origin P&S were reported at index price while the prices for shredded and P&S were almost in line.
Domestic scrap, steel prices
Mills were purchasing domestic ship breaking and melting scrap for their immediate requirements to avoid delays in transshipment ports. This supported domestic scrap, which had a limited downtick. The weekly index for ship scrap equivalent to P&S settled at BDT51,000/mt ($600/mt) ex-yards, down BDT500/mt.
For ship plates, the asking price dropped to BDT55,500/mt ex-yards, down BDT1,000/mt from prior Friday. The weekly index for domestic HMS 1&2 (80:20), Friday, settled at BDT47,000/mt ex-yards Chattogram, down BDT500/mt.
The weekly index for rebar from large-scale mills declined by BDT500/mt to BDT72,500/mt ex-works. The weekly Davis Index for rebar by medium-scale was at BDT67,250/mt ex-works, down by BDT750/mt, and for small-scale mills, the index settled at BDT61,500/mt ex-works, down by BDT1,000/mt.
The weekly index for billet was at BDT61,000/mt ex-works, down BDT1,500/mt.