Scrap imports jump 53% in 6 months

Bangladesh, a major scrap buyer in South East Asia, recorded ferrous scrap imports of 28.30 lakh tonnes in H1 (Jan-Jun) CY22 against 18.5 lakh tonnes in H1 CY21.

Both bulk and container ferrous scrap imports have jumped by 53 per cent in Jan-Jun of 2022 compared to the same period of the previous year.

The import scraps are used in steel mills to produce billet or iron sheet. The billets are used to make MS products including rods and angles.

The demand for MS products in the country is increasing for construction. In particular, the use of fabricated steel structures has increased. Iron sheet and steel products are also used in making inland vessel and ocean vessel.

Apart from this, new industries being set up in the economic zones and industries are expanding across the country. Due to the implementation of mega projects under the initiative of the government, the demand for steel has increased.

McDonald has recently launched a new factory in the steel sector in the country. Japanese company Nippon is also preparing to open a factory.

Meanwhile, the rod market of the country is expanding pushing up the demand for scrap. Local re-rolling mills, which were lagging behind, are now adding automated technology to increase capacity and start factory production.

Bangladesh has imported bulk ferrous scrap of 17.6 lakh tonnes in H1 CY2022 (January-June) compared to 10.9 lakh tonnes in H1 CY2021.

The country’s ferrous scrap imports were recorded at 3.3 lakh tonnes in June 2022 against 2.1 lakh tonnes in the previous month as per SteelMint data. A major leap of 57 per cent in imports was recorded on a monthly basis in June.

Country-wise import

Imports from US have skyrocketed. The largest bulk scrap was imported from the US. Shipments of 1.6 lakh tonnes were recorded in June, a whopping rise by 129 per cent from .7 lakh tonnes in May.

SteelMint’s monthly average price assessment for US-origin bulk HMS (80:20) scrap stood at $543 per tonne CFR Chittagong in May against $655 per tonne CFR in April.

A few steel mills in Bangladesh are planning capacity expansion or to set up new furnaces.

However, these projects are still underway and may be completed by CY2023. Once completed, this will increase the steel mills’ scrap consumption in the years to come.

Covid-19 pandemic effect on the industry and import declined to 37.6 lakh tonne in 2020 and 39.5 lakh tonne in 2021.

The current year the sector resumed its activities and imports have increased. Bangladesh’s scrap imports will touch 60 lakh tonnes by 2025, said a SteelMint research.