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

A few Bangladeshi mills rushed to buy ferrous scrap in containers amid anticipation of higher offers on improved global demand for scrap. Rebar prices in the domestic market have failed to pick up as expected despite the resumption of construction work. Consequently, mills had to keep their finished steel asking prices ‘flat to down’ on limited buying. 


Japan’s monthly scrap export tender ‘Kanto Tetsugen’ concluded Wednesday, Nov 11 with the winning bid average at JPY30,605/mt ($291/mt) fas Tokyo bay, up JPY2,199/mt ($21/mt) from JPY28,406/mt fas Tokyo bay in the prior month. The tender sold a total of 20,000mt of ferrous scrap for deliveries scheduled at the latest by December. Of the two winning bids, the first for 15,000mt #2 HMS sold to a leading steelmaker in Bangladesh, according to sources. 


In the bulk market, offers for US West Coast-origin HMS 1&2 (80:20) Wednesday were around $340-345/mt cfr Chattogram with limited buying interest. With Turkish mills accepting $305/mt cfr Turkey, bulk suppliers based in the US and Australia are likely to refuse bids below $340/mt cfr Chattogram. Buyers are expected to resume trades this week if finished steel prices show signs of recovery. 


Bangladesh preferred to book materials from Australia and Japan due to a shorter delivery period and better availability. 


The daily Davis Index for containerized shredded, Wednesday, settled at $350.36/mt cfr Chattogram, up by $5.8/mt from Tuesday. Offers jumped to $350-355/mt cfr Bangladesh on global cues. A few mills were hoping to book shredded at around $345/mt cfr Chattogram from South America and Australia.


The weekly Davis Index for containerized US-origin HMS 1&2 (80:20) Wednesday settled at $331.79/mt cfr Chattogram up by $3.43/mt from Tuesday. A few deals reported at the index prices while many mills preferred to stay away from the market. 


After a long gap, Brazilian suppliers and traders resumed offers to Bangladesh. Brazilian suppliers had reduced trades with Bangladesh amid robust domestic demand. The daily index for Latin America-origin HMS 1&2 (80:20) settled at $326/mt cfr Chattogram, up by $5/mt from Tuesday, while offers were at $325-328/mt cfr Chattogram for HMS 1&2 (80:20). Containerized HMS #1 offers from Brazil jumped further by $5-7/mt on Wednesday as suppliers target $330-335/mt cfr Chattogram.


“A sharp rise in imported ferrous scrap and weak demand for finished steel has impacted steel producers margins. Major mills are still focusing on their survival than profits. If overall steel demand rises in the domestic market then only Bangladeshi mills could import, otherwise, they will have to stay away,” said a steelmaker. 


Also, mills in Bangladesh are wary of the government’s decision on stricter collection of VAT. This could lead to higher input costs for many steel producers and force them to increase steel prices. 


A few mills have even lowered their selling prices by BDT500/mt ($5.89/mt) for steel products. On Wednesday, domestic billet offers were at BDT42,000-42,500/mt ex-works Chattogram stable from Tuesday, however, some traders sold billets at a discounted prices of BDT41,000-41,500/mt ex-works Chattogram amid weak demand.


Mid-sized mills dropped their asking prices to BDT51,000-51,500/mt ex-works Chattogram, down BDT500/mt despite high input costs due to scrap shortage. Large steel producers like BSRM and AKS have held their rebar prices stable at BDT56,000-57,000/mt ex-works. 


Domestic shipbreaking scrap equivalent to P&S traded at BDT32,000-32,500/mt ex-yard Chattogram, down BDT500/mt. Buyers on Wednesday were interested in rebar at BDT49,000-49,500/mt ex-works offered by a few small-scale rebar makers. 

($1= BDT84.78, JPY105.5)

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