US West Coast sellers have had success in selling bulk cargoes at higher prices to South Korea, Thailand and Vietnam in the last week, but will not find business so fruitful in Bangladesh, market participants said.

At the center of this negative sentiment is the mounting Covid-19 crisis in the South Asian country. Bangladesh has recorded 94,481 cases of the virus and 1,262 deaths as of June 17, according to the World Health Organization (WHO), up from just 2,911 cases as of June 3.

"There is lots of anxiety over a return of lockdown measures in Bangladesh. This is holding mills back from purchases," one South Asian trader said.

Concerns about the virus in Bangladesh and India have also weighed on local steel prices in both countries over the past week, sources said, reducing appetite for high-priced steel scrap. Furthermore, several of Bangladesh’s largest steel mills are only running at around 30-40% capacity utilization.

“Over the last couple of weeks, there has been no business to Bangladesh. The Chittagong market is very slow,” one Bangladesh mill source said.

“The virus situation is getting worse and the local market is not doing well,” a second Bangladesh mill source said.

“It is a very tight market for scrap and mills are confused - we are keeping an eye on the markets,” he said.

He added that mills were also waiting to see if the government would inject more cash into the economy, and particularly into the construction sector to help Bangladesh's economy recover from the virus.

Despite low demand from mills, higher deals for bulk cargoes from the US West Coast into other Asian destinations recorded earlier in the week led to higher expectations of prices from the sell-side into Bangladesh.

Fastmarkets’ price assessment for bulk cargoes of steel scrap, HMS 1&2 (80:20), deep-sea origin, import, cfr Bangladesh was $285-290 per tonne on June 18, narrowing up $5 per tonne week on week.

“Most mills on the Indian subcontinent are struggling to sell their finished steel as construction activity is dead,” a second South Asian trader said.

“Containerized shredded prices are coming off, and in my opinion, this is the peak,” he added.

After several weeks of quiet on the containerized scrap front, activity picked up in Bangladesh over the last week, with a handful of deals concluded.

An 80:20 mix of No1 and No2 heavy melting scrap from Australia was sold at $270 per tonne cfr Chittagong over the past week, with Brazil-origin HMS 1&2 (80:20) selling at $260 per tonne cfr.

Offers for European Union-origin shredded scrap were heard at $300 cfr Chittagong, while bids were at $280-285 cfr.