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

Imported ferrous scrap offers in Bangladesh rose sharply by $10-15/mt from the prior week. Bangladeshi steel mills continued buying limited volumes of imported scrap as end-user demand in the country is yet to returns to pre-COVID levels.  


The Davis Index for containerized shredded, Friday, settled at $332/mt cfr Chattogram, flat from Thursday, but up by $5/mt from the prior week. On Friday, offers for containerized shredded from the UK were heard at $335-340/mt cfr Chattogram against firm bids of $325-330/mt cfr Chattogram. Few deals for shredded reported at $330-335/mt cfr Chattogram. Most infrastructure projects have resumed, and demand is expected to return to normalcy after mid-September, with mills turning 100pc operational. Prices have hit 13 months high as shredded was last reported above $330/mt cfr Chattogram in August 2019. 


In the bulk market, HMS 1&2 (80:20) and shredded are being offered at $330/mt and $335/mt cfr Chattogram, respectively. A Chattogram-based mill is negotiating with a US supplier for a deal close to $328/mt cfr Chattogram, learnt Davis Index. The buyer is short of scrap inventories.


A sharp rise in bulk offers from Japan following the conclusion of Kanto tender at $20/mt higher than last month led to a sudden rollback of low-priced offers in the market. Bangladeshi mills refused offers from Japan and no major trades were reported this week. 


The index for US-origin HMS 1&2 (80:20) was at $323/mt cfr Chattogram, up by $8/mt from prior Friday. Trades for HMS 1&2 (80:20) reported at $315-320/mt cfr Chattogram, while by weekend suppliers pushed offers to $320-325/mt cfr Chattogram. Prolonged weak demand situation in Bangladesh could force suppliers to lower their offers as buyers preferred low-priced or domestic scrap.  


The index for UK/EU-origin HMS 1&2 (80:20) jumped by $11.25/mt to $308.75/mt cfr Chattogram from the prior week. A few sellers offered HMS 1&2 (80:20) at $320/mt cfr Chattogram, while bids were still at $315-318/mt cfr Chattogram. The Davis Index for Australian HMS 1&2 (80:20) settled at $314/mt cfr Chattogram, up by $5/mt from the prior week. Dhaka-based mills were reluctant to book material amid offers that have gone way above than their expectations.


Indian sponge iron offers continued to remain high amid a short supply of domestic iron ore in India. Small mills in Bangladesh preferred domestic scrap over sponge iron to reduce input costs. 


The index for Latin American-origin HMS 1&2 (80:20) settled at $310.9/mt cfr Chattogram, up by $3/mt from a week earlier. A few containers traded at $307-310/mt cfr Chattogram, while #1 HMS traded at $315-317/mt cfr Chattogram. Brazilian suppliers offered very limited materials on stronger domestic markets. 


The Davis Index for busheling settled at $348/mt cfr Chattogram, up by $2/mt from the prior week. P&S from South America and Australia traded at $325-330/mt cfr Chattogram. The weekly index for the grade settled at $330/mt cfr, up by $2/mt. 


Finished, semi-finished steel

Domestic steel demand in Bangladesh, though recovering, is still off from levels that could boost market sentiments. Only the four major steelmakers were in a position to book scrap and maintain sales of steel products. GPH Ispat has started restocking ferrous scrap ahead of commissioning its rebar plant, latest by December. The steelmaker had postponed production at the site due to sluggish demand post the COVID-19 crisis.  


The weekly index for domestic billet Friday settled unchanged at BDT41,000/mt ($483.3/mt) ex-works Chattogram from the prior week. Several trades reported around the index price. It could take another two months for Bangladesh’s rebar demand to recover to pre-COVID-19 levels, that is, after infrastructure projects resume construction. 


Major steelmakers in Chattogram are offering discounts to push sales. Most small and medium scale steelmakers in Dhaka expect prices to drop further in the coming days by around BDT1,500-2,000/mt. Large steelmakers in the country sold rebar at BDT55,000/mt ex-Chattogram, pulling the index down BDT1,000/mt from the prior week. Despite high imported scrap offers, mills had to liquidate their finished steel inventories at discounted rates to generate cash flow, said steelmaker. 


The weekly Davis Index for rebar from medium steelmakers settled at BDT50,500/mt ex-works, down by BDT250/mt from the prior week, inclusive of VAT. Rebar by small-scale producers traded flat at BDT49,000-49,500/mt ex-works from the prior week.


Domestic and shipbreaking scrap

In the shipbreaking market, Bangladeshi recyclers remained active though offers of $360-370/ldt cfr Chattogram were unchanged from the prior week. 


Domestic shipbreaking scrap equivalent to P&S traded at BDT30,300-30,500/mt delivered mill on Friday stable from the prior week. HMS 1&2 (80:20) was at BDT29,000-29,300/mt ex-Chattogram. The weekly index for HMS 1&2 (80:20) settled at BDT29,125/mt ex- Bangladesh yard, down BDT625/mt from the prior week, inclusive of local taxes. 



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