BANGLADESH STEEL SCRAP: Buyers choose containers over bulks in new deals
The steel mills in Bangladesh have picked up a raft of containerized scrap cargoes at higher prices over the past week, preferring boxes over bulk cargoes, market participants told Fastmarkets on Thursday June 17.
Demand for bulk material was muted in the country following recent completed trades, rising bulk prices from the United States West Coast and continued congestion at the Bangladeshi port of Chattogram.
“Bulk vessels keep having to wait at anchorage for barges to take material to land,” a Bangladeshi steelmaker said.
“This increases logistics costs by about $30 per tonne for a bulk cargo, which means it costs more than containers. Containers are more efficient and can be taken to the factory more quickly, whereas bulk is more challenging,” he said.
“Bulk is still an option but there is a growing tendency among the mills in Bangladesh now to go for containers, and to get at least 50% of supply coming in containers,” he added.
Buyers ideally want to book bulk scrap for August shipment now, but sellers were not willing to offer cargoes that far out, an exporter source said.
“Since all of the big buyers are covered on bulk cargoes, they will have to go for containers. They are buying HMS, plate and structural [P&S] and busheling in containers,” he said.
“One cargo we sold to Bangladesh this year was stuck at the port for 30 days due to congestion. Mills are booking cargoes and only receiving it two months later,” a South Asian trader said. “Buyers are lying low for now and may not purchase bulk again before the Eid al-Adha [religious holiday] next month.”
Buyers were also put off by rising offer prices for deep-sea cargoes from the US West Coast, with offers heard at $545 per tonne cfr Bangladesh for HMS 1&2 (80:20) earlier in the week.
A trading source said that one offer had reached $575 per tonne cfr for a mixed cargo of HMS and shredded scrap, which would put the HMS 1&2 (80:20) offer price at close to $570 per tonne cfr, although this was not confirmed by other sources.
Buyers were interested at prices no higher than $535-540 per tonne cfr Bangladesh for deep-sea HMS 1&2 this week, sources said.
Fastmarkets’ price assessment for bulk cargoes of steel scrap, HMS 1&2 (80:20), deep-sea origin, import, cfr Bangladesh, rose to $535-545 per tonne on Thursday, up by $15-25 per tonne from $520 per tonne a week earlier.
The corresponding assessment for steel scrap, shredded, deep-sea origin, import, cfr Bangladesh, was $545-555 per tonne on Thursday, up by $20-30 per tonne from $525 per tonne a week before, with sources indicating a $10-per tonne premium for shredded scrap over HMS in the deep-sea market.
With Bangladeshi mills streaming into the containerized scrap market for material, prices jumped dramatically over the week.
HMS 1&2 (80:20) was sold from the UK at $515 per tonne cfr Bangladesh at the start of the week, followed by deals at $520 per tonne cfr for Latin America-origin material and at $532-535 per tonne cfr for material from Australia.
A total of 7,000 tonnes of HMS 1&2 (80:20) was sold by a major trading company at $532 per tonne cfr Bangladesh this week, while the highest deal price heard was $540 per tonne cfr for UK-origin material.
Fastmarkets’ price assessment for steel scrap, HMS 1&2 (80:20), containerized, import, cfr Bangladesh, was $515-540 per tonne cfr on June 17, up by $15-30 per tonne from $500-510 per tonne cfr a week earlier.
Although there was less demand for shredded scrap in Bangladesh compared with other grades, prices in the country were boosted by deals heard to Pakistan in recent days at $540-542 per tonne cfr Port Qasim for containers of shredded, sources said. Offers to that market reached $550 per tonne cfr Pakistan by Thursday.
A deal for UK-origin shredded scrap was heard closed at $565 per tonne cfr Bangladesh this week, while offers were heard at $565-570 per tonne cfr by Thursday. Bids over the week were heard at $540-545 per tonne cfr.
The price assessment for steel scrap, shredded, containerized, import, cfr Bangladesh, was $540-565 per tonne on Thursday, up by $15-30 per tonne from $525-535 per tonne cfr a week earlier.
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