Weak Demand Due to Credit Issues and Low Steel Demand
Demand for imported scrap in Bangladesh remains sluggish, driven by ongoing issues with letters of credit and weak demand for finished steel. As per Kallanish, while scrap prices have recently increased in Turkey and India, sellers have been reluctant to lower their offers for the Bangladeshi market. Bids continue to remain low due to high inventories at local mills and a decline in rebar sales.
Current Scrap Offers and Bids
For HMS (80:20) scrap, originating from Australia/Brazil, offers are at around $365-370/ton CFR Chattogram, while bids are at $350/ton. For shredded scrap, the offers are around $385-390/ton, with bids lower by $10-15/ton.
Factors Contributing to Slow Scrap Demand
A Dubai-based scrap trader commented that the slow demand in Bangladesh is due to several factors:
- Limited government spending on infrastructure projects
- Ample scrap inventories at local mills
- Falling rebar prices
With demand increasing in India, traders are focusing more on the Indian market.
Local Rebar Prices
In Dhaka, rebar prices are hovering at around BDT 77,000-78,000/ton ($644-653/ton), while in Chattogram, prices are around BDT 81,000-82,000/ton ex-works.
Infrastructure Support
Meanwhile, the Asian Development Bank (ADB) has approved a $100 million loan to support infrastructure development in Bangladesh through public-private partnerships. This funding will address the country’s infrastructure challenges by providing long-term financing to the Bangladesh Infrastructure Finance Fund, enabling key projects that will support economic growth.
