BANGLADESH STEEL SCRAP: Buyers seize power, container prices continue fall
Prices for steel scrap imported into Bangladesh in containers have gone down again over the past week, while those for bulk cargoes were steadier, market participants told Fastmarkets on Thursday October 8.
Weaker scrap market sentiment across the globe in recent weeks, combined with unfavorable Bangladeshi steel prices, has led to mills in the country presenting scrap sellers with cheap bids over the seven days, sources said.
“Most customers are sending inquiries for containers of scrap, but their bid prices are dropping [too] much. People are testing the desperation levels of sellers now,” one exporter said.
“We are just holding out,” he added. “We have had good sales and October is totally sold out for containers. Plus, we feel that Turkey will have to come back [to the market] for scrap at higher prices.”
Others were more frustrated by the current situation.
“To be honest, I am completely out of the market now. It’s no fun and it’s all pain,” a South Asian trader told Fastmarkets.
“Some mills are trying their luck with bids at $295 per tonne cfr for containers of HMS 1&2 (80:20), but I would be surprised if anyone sold at that level,” a second South Asian trader said.
A third South Asian trader said that he had an offer rejected by a buyer this week because increased volatility in the markets forced the mill to leave the market and wait until a clearer picture emerged.
Finished steel prices in the country were still suffering from the cut-price sales tactics adopted by some mills.
Rebar prices in the Dhaka market were around 50,000 taka ($579) per tonne, but one large Chittagong steelmaker was reported to be continuing to undercut the market to sell material at around 48,000-49,000 taka per tonne.
A fourth South Asian trader source said that the price for bar products would mean that scrap must be purchased at $300 per tonne to make any margin on the sale of steel.
Container deals at weaker prices
Several thousand tonnes of containerized scrap was sold to the South Asian country over the past week at prices lower than those seen in recent weeks.
Containers of HMS 1&2 (80:20) from Latin America sold at $300 per tonne cfr Bangladesh, while bids for UK-origin material slipped to $295-300 per tonne cfr compared with $305 per tonne heard for deals closed from the UK last week.
Offers of HMS 1&2 (80:20) in containers were $305 per tonne cfr, while HMS (90:10) from Chile and Canada was traded at $310 per tonne cfr Bangladesh over the past week, with sources indicating that HMS 1&2 (90:10) usually holds a premium of $5 per tonne over the 80:20 grade.
Fastmarkets’ price assessment for steel scrap, HMS 1&2 (80:20), containerized, import, cfr Bangladesh, was $300-305 per tonne cfr on Thursday, down by $1-5 per tonne from $305-306 per tonne cfr one week ago.
Shredded scrap from the United States and the UK was sold at $322 per tonne cfr Bangladesh this week, with material from New Zealand traded at $315-319 per tonne cfr. EU-origin material was heard sold at $320-325 per tonne cfr.
Offers from Australia were heard at $320 per tonne cfr Bangladesh and from the UK at $325-328 per tonne cfr.
Fastmarkets’ price assessment for steel scrap, shredded, containerized, import, cfr Bangladesh, was $315-325 per tonne on Thursday, down by $2-10 per tonne week on week from $325-327 per tonne seven days ago.
Bulk market subdued
While there was plenty of action in the container sector, the market for deep-sea cargoes remained quiet due to both relatively high offer prices and a lack of interest from mills.
One Bangladeshi steelmaker source told Fastmarkets that the large price gap between containers and deep-sea bulk scrap has driven him away from negotiating for a bulk cargo.
“The difference is too high, so why should I buy a bulk cargo?” he asked, adding that container prices should be only $5 per tonne lower than deep sea bulk prices.
While HMS 1&2 (80:20) in containers was available at $300 per tonne cfr, the lowest price that bulk deep sea sellers from the US would be able to manage was $15 per tonne higher, at $315 per tonne cfr, sources told Fastmarkets.
Fastmarkets’ weekly price assessment for bulk cargoes of steel scrap, HMS 1&2 (80:20), deep-sea origin, import, cfr Bangladesh, was $315 per tonne on October 8, narrowing from $310-320 per tonne a week earlier.
Fastmarkets’ price assessment for bulk cargoes of steel scrap, shredded, deep-sea origin, import, cfr Bangladesh, was $320 per tonne on Thursday, narrowing from $315-325 per tonne last week.
Stable pricing in the US domestic scrap market has led to exporters reducing their offers, the third South Asian trader said.
“US domestic demand will start cooling by the end of the month, and sellers will have to reduce their prices if they want to sell to the export market,” this trader said. But he added that prices would then move up again toward the end of the year.
A US trader was optimistic that export prices would recover quickly. “I think the drop in prices is the seasonal bottom of the market, but there is too much demand coming online and winter is approaching,” he said.
Although no deep-sea deals were concluded, Bangladesh was heard to have bought Japan-origin H2 in bulk at $305-307 per tonne cfr in the past week, and Shindachi bara at $328 per tonne cfr.
Fastmarkets’ flagship global steel event, Steel Success Strategies, is running as an online conference on October 26-28, 2020. Register today to hear directly from Fastmarkets’ pricing experts and analysts, as well from some of the most important chief executive officers in global steel.