Bangladeshi mills continued to book ferrous scrap to maintain inventories for the next two months. But many Dhaka-based mills have stepped away from the market to avoid losses should the prices fall further. Following the cues from Chinese markets, bids on Tuesday dropped. In China, iron ore futures dropped by over 9pc in a day due to the proceedings of the two-session meeting.
The daily Davis Index for containerized shredded, Tuesday, settled at $480/mt cfr Chattogram, down by $5.23/mt. Containerized shredded trades were in the range of $480-485/mt cfr Chattogram. Large steel producers looked to restock inventories and a Chattogram-based mill was heard to have bought over 25,000mt of ferrous scrap from various supply countries in the last seven days.
In the bulk market, Bangladeshi mills bought two small Japanese bulk mixed cargoes in the range of $490/mt cfr Chattogram.
The index for HMS 1&2 (80:20) from Latin America settled unchanged at $458/mt cfr Chattogram. Suppliers focused on domestic sales where prices are higher than in South Asia. Bangladeshi mills bought material from regions with a short delivery period. But due to a lack of sufficient supply, mills had to opt for material from other regions, including the EU/UK.
The daily Davis Index for US-origin containerized HMS 1&2 (80:20) settled unchanged at $460/mt cfr Chattogram. HMS 1&2 (80:20) sold in the range of $460-465/mt cfr Chattogram.
Domestic scrap continues to decline
Amid increased supply with domestic yards, prices for ship scrap equivalent to P&S dropped further on Tuesday to BDT42,000-42,500/mt ex-works. Most furnaces in Dhaka negotiated for domestic HMS 1&2 (80:20) in the range BDT40,000-40,500/mt ex-yard Chattogram.
On Tuesday, ship plates of 16mm size traded at BDT46,000-46,500/mt ex-yards, unchanged from a day ago. Supply from shipbreaking activities is expected to increase with most yards ramping up demolition. Sellers are bearish ahead of the Eid holidays followed by monsoons in the subsequent months.
During the monsoons, finished steel prices usually decline by BDT5,000-7,000/mt amid weak demand. Buyers could hence stay away from booking large volumes.
Domestic billet prices were at BDT54,500-55,500/mt ex-works Chattogram, down BDT1,000/mt down from Friday. Most government projects have delayed payment cycles resulting in cash flow issues for large mills. Exacerbating their woes are elevated raw material costs.
Large steelmakers kept their asking rates for rebar unchanged at BDT67,000-67,500/mt ex-works. Mills could offer discounts to encourage trades.
In the retail market, rebar from medium-scale mills and re-rollers traded at BDT63,000-63,500/mt ex-works. Availability of lower prices rebar made from re-rollable scrap has created competition in the market and large mills were not able to sell material at their targeted prices.