Amid prevailing delays in opening letters of credit (LC) in Bangladesh this week, imported scrap offers have risen dramatically. The rise is mainly attributed to high demand and consumption of scrap in the US domestic market and shortages of material in Europe and the UK, sources tell Kallanish.

These hikes apply to both containerised and bulk cargoes. This week, a Bangladeshi steel major bought a 30,000-tonne Australian-origin cargo containing 14,000t of bonus booked at $498/tonne, 13,000t of HMS at $488/t and 3,000t of heavy chips at $478/t cfr Chattogram.

Following this deal, offers surged dramatically, by $10-12/t. Two new offers of 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 bids at $485/t and $480/t cfr Chattogram for shredded and HMS, respectively, but the seller rejected them.

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 given at $500-505/t cfr Chattogram. Very limited deals were heard concluded at these levels mainly because of the LC delays.

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 was booked at $475-480/t cfr Dhaka, a source involved in the deal informs Kallanish.

"Unusual delays of two to four weeks in LC opening are killing the imported scrap business in Bangladesh," a scrap importer says. "Owing to this, [Bangladesh] merchants are struggling to keep their commitment to the [international] yards; hence, they [merchants] are unwilling to aggressively approach buyers [mills]."

"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.