Posted on 03 Mar 2023
Amid the prevailing delay in the opening of letters of credit (LC) in Bangladesh this week, the imported scrap offers have risen dramatically. The rise in offers is mainly attributed to high demand and consumption of scrap in the domestic United States market and shortages of materials in Europe and the United Kingdom, sources tell Kallanish.
These hikes have been implied for both containerised and bulk cargoes. This week, a Bangladeshi steel major bought 30,000 tonnes of Australian-origin cargo containing 14,000t of bonus booked at $498/t, 13,000t of HMS at $488/t and 3,000t of heavy chips at $478/t cfr Chattogram.
Following this deal, the offers surged dramatically by $10-12/t. Two new offers for US west coast cargoes, each containing 32,000t of shredded and HMS mix, were heard at $505/t and $495/t cfr Chattogram, respectively. According to sources, a steel mill reportedly sent it bids at $485/t and $480/t cfr Chattogram for shredded and HMS, respectively but the seller denied selling at this level.
Meanwhile, offers for containerised UK-origin 211-grade shredded scrap were heard at $505-510/t cfr Chattogram and Dhaka on Thursday. Offers for Brazil-origin 210- and 211-mix grade shredded were offered at $500-505/t cfr Chattogram. Very limited deals were heard concluded at these levels mainly because of slowed LC opening.
Offers for 8,000t of Singapore-origin PNS scrap were noted at $500/t cfr Chattogram and Europe- and UK-based PNS at $515-520/t cfr Chattogram. Europe-origin blue steel was offered at $530-540/t cfr Chattogram and Dhaka.
Bookings for 4,000t of Brazilian-origin HMS 80/20 were heard at $465/t cfr Chattogram on Wednesday and Thursday, while Brazil-origin HMS 90/10 were booked at $475-480/t cfr Dhaka, a source involved in the deal informed Kallanish.
"Unusual delays of two to four weeks in the LC opening are killing the imported scrap business in Bangladesh," a scrap importer says. "Owing to this, sellers are struggling to keep their commitment to the yards; hence, they are unwilling to aggressively approach the buyers."
"Small steel mills in Dhaka have stopped their production, and big mills have reduced their production. There is confusion in the market, and not many bookings are happening in Bangladesh," the source adds.
Offers for ship scrap from containers were heard at $610/light displacement tonne (ldt). Scrap from dry bulkers and tankers is hovering at $570/ldt and $590/ldt, respectively.
Source:Kallanish
