Containerized imported ferrous scrap trades in Bangladesh remained slow as mills wait for Chinese mills to resume steel trades. Once China returns to the market after their new year holidays, the global commodity market is likely to gain. Domestic finished steel demand for the coming months is expected to stay bullish with peak construction season around the corner. Inquiries are likely to increase soon.
The Davis Index for containerized shredded, Monday, settled at $432.19/mt cfr Chattogram, up by $8.44/mt from Friday. Bids for shredded were at $425-430/mt cfr Chattogram against offers of $435-440/mt cfr. Container freight rates from the UK to Bangladesh declined by $4/mt, but major shipping lines like MSC and Maersk are yet to revise prices.
Traders believe a considerable drop in freight rates seems like a distant possibility despite the easing availability of containers. This is likely to keep the landed cost of imported ferrous scrap elevated.
Mills preferred HMS and P&S over busheling and shredded scrap priced higher. The daily Davis Index for containerized HMS 1&2 (80:20) from the US settled at $410/mt cfr Chattogram, up by $7.5/mt; while the index for the grade from Latin America was at $409/mt cfr Chattogram, up by $6/mt.
There were only a few offers for HMS #1 from Chile with sellers targeting $420/mt cfr Chattogram. Most suppliers stayed away from seaborne trade amid strong domestic demand and prices. Continued price rise in the global raw material market is expected to force mills to raise bids for containerized HMS 1&2 (80:20) to $410-420/mt cfr Chattogram.
High iron ore and pellet export prices in India continued to strengthen offers for Sponge iron to $365-370/mt cpt Benapole or $380-385/mt cfr Chattogram.
In the bulk market, inquiries and negotiations increased amid expectations of sustained finished steel demand in the coming two months. Offers from Australian yards for bulk shredded were at $445-450/mt cfr Chattogram. European yards targeted $450-460/mt cfr, but buyers were not keen on these prices. Offers for Japanese #2 HMS in small bulk cargoes were at $435-440/mt cfr Chattogram and $410-420/mt cfr Vietnam.
Domestic steel stabilizes, demand improves
Ship scrap equivalent to P&S traded at BDT40,000-41,000/mt ex-works. Domestic billet traded at BDT50,000-50,500/mt ex-works Chattogram. Large scale steelmakers offered rebar at BDT65,000-66,000/mt ex-works. Mills canceled discounts amid rising imported scrap prices and could hike steel prices in the coming days.
Rebar offers from medium-scale mills in Dhaka were at BDT59,000-60,000/mt ex-works. Small-scale mills offered rebar at BDT54,500-55,000/mt ex-works. Prices of domestic scrap and billet have gone up, but rebar prices remained unchanged discouraging mills from scrap purchases.
For shipbreakers, offers of scrapped bulk vessels were at $410-430/ldt cfr, but demand remains slow. With a rise in global melting prices, recyclers are likely to accept these price levels.