Market Overview
The Bangladeshi scrap import market remains sluggish this week, with buyer interest significantly muted. This lack of activity is driven by weak demand from the steel sector, exacerbated by political instability and macroeconomic challenges.
Price Trends
- Imported Scrap:
- HMS 80:20 (Brazil and Australia origin): $360-370/t cfr Chattogram.
- Shredded Scrap: $385-390/t cfr Chattogram.
- Domestic Market:
- Scrap prices: BDT 49,500-50,000/t ($410-418/t).
- Rebar prices in Dhaka: BDT 83,000/t ex-works.
Factors Behind the Weak Demand
- Slow Infrastructure Activity: Public construction and government projects, which drive 70% of local steel demand, have largely stalled since the political transition in August.
- Construction and Real Estate Challenges: High inflation, elevated interest rates, and a capital crunch continue to dampen demand in these key sectors.
- Steel Mill Struggles: Mills are operating at only 50-55% capacity, often selling at a loss amid subdued rebar sales and reduced production.
Industry Sentiment
According to a scrap trader in Dhaka, the steel sector is reeling from political and economic pressures, with steelmakers facing significant losses. Despite some optimism for recovery, improvements are unlikely in the short term.
Outlook
The near-term demand for scrap in Bangladesh appears bleak, hindered by:
- Weak domestic demand.
- Currency depreciation.
- Challenges with securing letters of credit.
The ongoing uncertainty in infrastructure and real estate sectors suggests continued pressure on scrap imports and local steel production.
