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

Mills in Bangladesh ramped up steel productions post easing of the nationwide lockdown, yet steel trades in the retail markets are yet to recover as expected. Demand for imported ferrous scrap remained subdued as most buyers delayed restocking. 


Amid low buying interest, the daily Davis Index for containerized shredded, Friday, stayed unchanged at $550/mt cfr Chattogram. The index gained $1.25/mt from Aug 13. Shredded scrap buyers were quiet amid the holiday lull and are waiting for monsoon’s withdrawal to resume trades. Containerized freight rates, however, continued to trend up, rising close to $90/mt on New York to Chattogram ports. 


A few mills are struggling to increase their credit limits with banks. Sharp rise in commodity prices and freight charges have hurt their import capabilities. Mills are operating with short LC limits. The process of extension in credit limits takes months’ which forced many mills to stay away from imported material. 


Despite weak global cues from the Turkish market, gradually improving demand in South Asian countries supported sellers’ sentiments. In East and Southeast Asia, demand showed an uptick, while Japanese scrap prices fell by $5/mt post-Kanto tender. Prices in Asia are expected to hold, traders said.  


The daily index for US-origin containerized HMS 1&2 (80:20) settled unchanged at $515/mt cfr Chattogram, from a day and week prior. Increasing availability of HMS in most supplier countries has weighed prices down, widening the gap between HMS and prime grades. 

The indexes for UK-origin and Australia-origin HMS 1&2 (80:20) settled at $508/mt and $518/mt cfr Chattogram, respectively, down by $2/mt from Aug 13. Buyers sought HMS from Brazil and the UK amid high freight charges for bulk cargoes from Australia and the US west coast.


The Davis Index for P&S 5ft dropped by $3/mt to settle at $552/mt cfr, from last Friday, while the index for #1 busheling was at $565/mt cfr Chattogram, down by $3/mt. Deals were very slow for higher grades.


The daily Davis Index for HMS 1&2 (80:20) from Latin America remained at $500/mt cfr Chattogram, $1/mt. The index dropped by $3/mt, as compared to last Friday. Deals were reported at $500/mt cfr Chattogram as global prices softened, and bids dropped from importers. Traders are witnessing a shortage of empty containers for exports. 


Domestic steel up, sales slow 

Buyers in the domestic market remained unwilling to import sponge iron from India.


The weekly index for ship scrap equivalent to P&S settled at BDT52,000/mt ($595/mt) ex-yards, up BDT1,500/mt. For ship plates, asking rates were rose to BDT59,000/mt ex yards. The weekly index for domestic HMS 1&2 (80:20) was at BDT48,000/mt ex-yards Chattogram, up by BDT1,500/mt on Friday.


The weekly index for rebar from large-scale mills rose by BDT250/mt to BDT73,250/mt ex-works. The weekly Davis Index for rebar by medium-scale was at BDT68,500/mt ex-works, up by BDT500/mt, and for small-scale mills, the index settled at BDT64,000/mt ex-works, up by BDT1,250/mt. 


The weekly index for billet was at BDT63,000/mt ex-works, up BDT1,500/mt. The supply of finished steel has eased due to inventory pile-up during the lockdown. Mills focused on liquidating steel stocks and postponed their ferrous scrap buying activities. 


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