Metals & Mining Theme, Ferrous, Non-Ferrous

January 30, 2025

INTERVIEW: Bangladesh heavily reliant on ferrous scrap imports, BSRM executive says

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HIGHLIGHTS

Country applying for scrap imports under EU’s WSR

Bangladesh has 'green steel' industry due to scrap dependence

Bangladesh is heavily reliant on ferrous scrap imports for its steel industry and is preparing to apply for continued imports under the EU's revised Waste Shipment Regulation, Sanjoy Ghosh, head of Supply Chain Management at steel mill BSRM, said.

Bangladesh must import ferrous scrap for its electric arc furnaces and induction furnaces. Around 10% of Bangladeshi steel mills' raw material input consists of direct-reduced iron, also known as sponge iron, and pig iron, with the remaining 90% consisting of recycled ferrous material, Ghosh said in an interview on the sidelines of the Materials and Recycling Association of India's conference in Jaipur Jan. 29.

"Bangladesh steel industry is a green industry as we only have induction furnaces and electric arc furnaces, so mostly using ferrous scrap for steelmaking," Ghosh said. "Bangladesh is already a winner as we are using ferrous scrap for steel production."

"Bangladesh is in the application stage for the EU's Waste Shipment Regulation. We will submit our request and we will continue with our ferrous scrap imports," Ghosh added.

Like Indian scrap importers, Bangladeshi importers will need to comply with the new EU Waste Shipment Regulation, which will impact non-Organization for Economic Cooperation and Development countries importing scrap from the bloc.

According to the new regulation, importers in non-OECD countries such as Bangladesh and India must request authorization from the European Commission to import EU non-hazardous waste, including ferrous scrap, for recovery by Feb. 21, 2025. Failure to receive approval could prevent importers from procuring ferrous scrap from the EU starting May 21, 2027.

Bangladesh imported 5.19 million mt of ferrous scrap in 2024, up 10.8% from 4.68 million mt in 2023, according to customs data that Ghosh cited in the interview. Domestic scrap generation was 1.5 million mt/year while Bangladesh consumes about 6.5 million mt of scrap each year, he added.

Steel demand in Bangladesh is largely driven by household construction with about 70%, while 30% comes from large infrastructure and construction projects.

From December 2024 onward, ongoing government projects are being fulfilled, which are stabilizing the market, Ghosh said.

There have not been any problems in opening letters of credit financing in Bangladesh from late 2024, he said, adding that government restrictions on opening L/Cs had started toward the end of 2022 as the taka depreciated.

The taka was around Taka 121.63 against the dollar at 4:30 pm UK time on Jan. 29, according to xe.com, having depreciated sharply from around Taka 89 in May 2022.

"Slowly this has improved," Ghosh noted.

Expansion at BSRM

In 2024, BSRM imported 1.8 million mt of ferrous scrap, of which 50% was heavy melting scrap, 30% was shredded scrap and the rest was plate and structural scrap and bushelling scrap.

BSRM started production at its 600,000 mt/year rolling mill in October 2024 and plans to commercialize it after inauguration in February, Ghosh said.

The rolling mill expansion is using technology from Italian provider Danieli to produce rebar and wire rod. BSRM now has a 2.4 million mt/year melting and 2.4 million mt/year rolling capacity in Mirsarai, Chattogram.

Platts, part of S&P Global Commodity Insights, assessed the price of containerized shredded scrap in the neighboring Indian import market at $370/mt CFR Nhava Sheva Jan. 29, unchanged on the day.

Platts assessed Turkish imports of premium heavy melting scrap 1/2 (80:20) at $343.25/mt CFR Jan. 29, up 75 cents/mt day over day.


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