BANGLADESH STEEL SCRAP: Market buoyed after two mills book cargoes

Prices for bulk cargoes of steel scrap imported to Bangladesh jumped over the last seven days following two fresh deals from the United States West Coast, sources told Fastmarkets on Thursday August 13.

Market participants said that Bangladeshi mills have booked at least four bulk scrap cargoes over the last three weeks, with three different mills purchasing material.

One deal was closed for 8,000 tonnes of HMS 1&2 (80:20) at $307.50 per tonne cfr Bangladesh, 17,000 tonnes of shredded scrap at $312.50 per tonne and 7,000 tonnes of No1 busheling at $322.50 per tonne for loading and shipment by early September.

The mill was initially offered HMS 1&2 (80:20) at $310 per tonne cfr Bangladesh and though they tried to push prices down further, their pressing need for a prompt shipment meant they were able to only shave off $2.50 per tonne from the price, one exporter source said.

The consumer required the material quickly due to their low stocks of material ahead of a push to boost output from their electric arc furnace (EAF) from September, Fastmarkets was told.

A second cargo from the US West Coast was sold at an average price of $310 per tonne cfr Bangladesh for 16,000 tonnes of HMS 1&2 (80:20) and 16,000 tonnes of shredded scrap for full September shipment.

Fastmarkets’ price assessment for bulk cargoes of steel scrap, HMS 1&2 (80:20), deep-sea origin, import, cfr Bangladesh was $307.50 per tonne on Thursday August 13, up from $295 per tonne one week before.

The fresh cargoes join two US West Coast bulk sales that closed during the previous two weeks, including a deal at $295 per tonne cfr for HMS 1&2 (80:20) and a deal from the same seller comprising a total 32,000 tonnes with the HMS 1&2 (80:20) element of the deal priced at $290 per tonne cfr.

Will the buying bonanza continue?
Market participants were divided over whether the hot streak of buying in Bangladesh could continue though.

“Bangladesh is still looking for cargoes and it has awoken from its slumber,” one South Asian trader said. “In fact, the Bangladesh market might become the benchmark for prices in Asia - you have three mills wanting material and the moment they start fighting, prices will become inflated,” he said.

“I see the market going on a bull run. Eid is over and the market is bumping up. I expect this to go on until December and we may see a correction in January,” he added.

With Turkish mills taking a break from buying, Bangladesh steelmakers are setting the pace in global ferrous scrap bulk markets now.

The premium for Fastmarkets’ price assessment for bulk cargoes of steel scrap, HMS 1&2 (80:20), deep-sea origin, import, cfr Bangladesh over Fastmarkets’ price assessment for steel scrap HMS 1&2 (80:20 mix) US origin, cfr Turkey was $23.70 per tonne on Thursday. That was the highest since June 5 and the third highest since the Bangladesh price was launched on March 19.

“The Bangladesh market continues to show strong demand and I think sellers are now looking at even higher prices for the next round of offers,” a second South Asian trader said.

“Though China seems to be taking a temporary break from importing billet, concurrently, iron ore [prices are strong] so I expect good demand and high pricing to continue in the near term,” he said.

Fastmarkets’ daily price index for 62% Fe fines, cfr Qingdao was $121.38 per tonne on Thursday, down $0.13 per tonne day on day but up sharply from $111.09 per tonne one month back.

Supply tightness
Material availability may be a problem and may prevent further bulk sales to Bangladesh at this stage, with the exporter source saying that some suppliers were sold out. Together with the sales to Bangladesh, two bulk sales to Vietnam at $295 per tonne cfr for HMS 1&2 (80:20) were heard in recent weeks.

“Two of the largest US exporters are well sold and there is nothing left for September shipment as it appears. They think there may still be some legs in the Turkish market,” he said.

Scrap supply is also tight out of Australia, with no offers for bulk cargoes and very few containers in the market partly due to the solid local scrap demand and partly due to stricter Covid-19 lockdowns in some areas, Fastmarkets heard.

Victoria state - in south-eastern Australia - re-entered lockdown conditions in early August following a spike in new Covid-19 infections amid a second lockdown.

“One scrap buyer in Victoria said he opened at 8am and closed at 2pm and there was not one delivery in that time,” an Australian trader said.

“A lot of scrap is generated from [demolition] and the Australian government has also blocked construction and other non-essential work in Victoria,” he added.

More information about Fastmarkets’ expanded Asian scrap coverage can be found in our new Asia Steel Scrap Spotlight. Sign up today for free price and news alerts.

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