Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Imported ferrous scrap offers in Bangladesh remained firm following a surge in Turkish bulk prices. Trading, however, nearly paused this week amid Eid-al-Fitr celebrations. Laborers have migrated to their hometowns. The diversion of liquid oxygen for medical use led to the suspension of operations at ship-breaking yards.  


The government is likely to extend the lockdown by another week after May 16, keeping logistics slower than usual. Usually, it takes eight to ten days for laborers to return to work after the Eid holidays. This year, however, it could take longer. 

Steelmakers are running short of ferrous scrap inventories, are thus expected to be back in the market. 


The daily Davis Index for containerized shredded, Friday, settled unchanged at $538.75/mt cfr Chattogram. Suppliers from UK/EU offered containerized shredded at $540-545/mt cfr Chattogram with bids lagging at $520-530/mt cfr Chattogram from mills. The index rose by $33.75/mt from the prior Friday.


Yards were interested in catering to bulk inquiries due to a shortage of empty containers. With limited availability of shredded with US yards, most were keen on supplying material to China where bids were higher than other importing countries. 


The Davis indexes for P&S and #1 busheling, Friday, cfr Chattogram rose to $549/mt and $571/mt, up by $34/mt and $39/mt respectively, from the prior Friday. Semiconductor and chip shortages have forced automakers to shut productions, resulting in the limited generation of grades like busheling. On Friday, offers for the UK-origin P&S in containers were above $550-560/mt cfr Chattogram while mills were interested in $520-525/mt cfr Chattogram levels.


The daily index for HMS 1&2 (80:20) from Latin America settled at unchanged at $506/mt cfr Chattogram. Most Latin American yards kept their offers for HMS 1&2 (80:20) above $505-510/mt cfr Chattogram on higher freight charges and active domestic demand, pushing the index up by $23/mt from prior Thursday. 


The indexes for US-origin, UK-origin, and Australia-origin containerized HMS 1&2 (80:20), Friday, settled at $517.5/mt, $510/mt, and $520/mt cfr Chattogram, up by $32.64/mt, $30/mt, and $33/mt, respectively, from May 7.

Medium-scale mills have cut production to match weak steel demand due to upcoming monsoons. Unable to manage their operations at full scale because of financial challenges and labor shortage, small-scale steelmakers have halted production.


Steel prices under pressure 

The weekly index for ship scrap equivalent to P&S settled at BDT47,000/mt ($554/mt) ex-yards, down $500/mt on Friday. The index for domestic HMS 1&2 (80:20) was at BDT45,500/mt ex-yard Chattogram, down BDT500/mt. Offers for 16mm ship plates were unchanged at BDT54,500-55,000/mt ex-yards.


The weekly index for billet was at BDT60,500/mt ex-works, down BDT1,000/mt from the prior Friday. Limited trades were reported at BDT59,500-60,500/mt ex-works after discounts. Mills, however, target a minimum of BDT65,000/mt ex-works for billets considering the increased conversion cost and raw material import prices. Large-scale steelmakers could announce hikes once they return to the market and ramp up operations to usual levels. The upcoming monsoon season could have a limited impact on the market in the near term. Their offers for rebar were firm at BDT70,000-71,000/mt ex-works, and the index settled unchanged at BDT70,500/mt ex-works on Friday. Trades for finished steel have thinned amid a pause in construction activities during the Eid holidays. 



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