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

Imported ferrous scrap trades in Bangladesh have remained slow post of the lockdown to restrict the second wave of COVID-19 infections. Demand is slow due to reduced working hours in Ramadan, but suppliers continue to hold offers high on bullish steel prices and expectations of active inquiries from Pakistan and other Asian countries.  


Monsoon season will begin soon after Eid, a time when construction activities take a backseat, so overall demand is expected to be slower resulting in tepid demand from Bangladeshi mills, traders noted. They added, high freight charges will hold offers elevated in the near terms.


The daily Davis Index for containerized shredded, Friday, settled at $482.5/mt cfr Chattogram, up $3.75/mt from Thursday. The index is unchanged from the prior week as offers rebound in the latter half of the week on strong global cues. UK-origin containerized shredded offered at $485-490/mt cfr Chattogram, but buyers remained away.  


Most buyers decided to hold their purchases till there is clarity on price direction. A single deal for UK origin shredded at $485/mt cfr Chattogram for prompt delivery boosted prices further. However, most mills resisted these levels amid ample scrap inventories on-hand.


Production of large mills have remained unimpacted by lockdowns. They are operating at full capacity with onsite worker accommodations and COVID-19 precautions. While small to medium scale mills have cut production to match weak steel demand and the upcoming monsoon lull. 


Indian Sponge iron was offered at the equivalent of $435-440/mt delivered to Narayanganj on a barge, unchanged from the prior week.  


In the bulk market, offers for HMS 1&2 (80:20) from the US West Coast rose further in anticipation of a stronger May domestic market. Japanese export offers for small bulks increased amid rising freight rates. With improved demand from Taiwan, Vietnam and Chinese buyers, Japanese sellers stayed away from Bangladeshi buyers.  


The index for HMS 1&2 (80:20) from Latin America settled at $463/mt cfr Chattogram, rebounding $4/mt from prior Friday. Most Latin American yards preferred to sell in their domestic market while some raised HMS 1&2 (80:20) offers to $465-470/mt cfr Chattogram on higher freight charges.  


The daily indexes for US-origin, UK-origin, and Australia-origin containerized HMS 1&2 (80:20) moved up to $465/mt, $460/mt, and $467/mt cfr Chattogram, up by $2.5/mt, $2/mt and $3/mt. UK origin HMS offers recorded faster growth over other origins following the depreciation of the British pound against the US dollar.  


Until Friday, offers for premium scrap grades like P&S and Busheling moved up by $10-15/mt on limited supply. Lower industrial generation due to shutdown of auto plants have disrupted the supply of premium grades. The Davis indexes for P&S and #1 Busheling, Friday, settled at $493/mt and $510/mt, down by $2/mt and $4/mt, respectively, from the prior week. 


Domestic steel prices flat  

Domestic steel prices were expected to drop amid extended lockdown impacted bookings. Construction demand has also cooled off on the suspension of few projects. Yet steel and domestic scrap prices remained firm on higher input costs.


The weekly index for ship scrap equivalent to P&S was stable at BDT46,500/mt ex-yards. The index for domestic HMS 1&2 (80:20) was at BDT45,500/mt ex-yard Chattogram.


Offers for 16mm ship plates at BDT52,500-53,000/mt ex-yards, while import prices for scrapped vessels were at $500-510/ldt cfr Chattogram. Recyclers stayed away from high offers which affected the generation of ship scrap.


Small and medium-scale steelmakers opted to sell rebars over billet due to better margins. Domestic billet offers continued to stay firm above BDT60,500-61,000/mt ex-works Chattogram despite limited trades. The weekly index for billet was at BDT60,500/mt ex-works, unchanged from the prior Friday.  


The index for rebar from medium-scale mills in Dhaka was unchanged at BDT66,500/mt ex-works. A few Dhaka-based steel mills raised offers to BDT67,500-68,000/mt ex-works to sync their price with large steelmaker’s offers.


Small-scale mills continued selling rebar at considerably lower prices by around BDT10,000/mt in comparison to the large steelmakers. The weekly index for rebar from small-scale mills settled at BDT61,000/mt ex-works, stable from a week earlier. Financial challenges due to the pandemic have forced small producers to hold prices low.




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