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

Bangladeshi steel mills bought limited containers of imported scrap this week. Steelmakers are being cautious of booking more material before end-user demand returns to pre-COVID-19 levels. Despite the subdued sentiment, imported bulk scrap offers rose by $10-15/mt from the prior week. 


The Davis Index for containerized shredded settled at $327/mt cfr Chattogram, up by $2/mt from Thursday, but only a rise of $1/mt from the prior week. On Friday, offers for containerized shredded from the UK were heard at $330-335/mt cfr Chattogram. Few deals for Australia and New Zealand-origin shredded were heard at $325/mt cfr Chattogram. Most infrastructure projects have resumed, and demand is expected to normalize after Mid-September with mills becoming 100pc operational.


In the bulk market, a few shredded cargoes were offered at $320-325/mt cfr Chattogram levels, with no trades reported at these levels. After booking two small bulk cargoes from Japan last week, buyers halted trades, mainly due to strengthened offers. Busheling scrap from Japan was offered at $335/mt cfr Chattogram on Friday. 


Indian sponge iron offers rose by $10/mt to $310-315/mt cfr Chattogram from the last week making it less viable for Bangladeshi furnaces. They instead opted for domestic scrap to fulfill their requirements. 

The index for Latin America-origin HMS 1&2 (80:20) settled at $307.75/mt cfr Chattogram, up by $0.39/mt from Thursday. 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 material in the export market with strong domestic demand and the resulting higher realization. 


The index for US-origin HMS 1&2 (80:20) settled at $315/mt cfr Chattogram, up by $2/mt from Thursday. Sellers targetted $315-320/mt cfr Chattogram for, while buyers stayed away from bidding. The Davis Index for Australian HMS 1&2 (80:20) settled at $312.92/mt cfr Chattogram, up by $4/mt from the prior week. Mills in Dhaka were reluctant to book material at these levels.


The Davis Index for busheling settled at $346/mt cfr Chattogram, up by $8/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 $328/mt cfr, up by $3/mt. Demand improved for high-grade scrap with auto manufacturing gaining pace. 


Finished and semi-finished steel

Domestic steel demand though on a path to recovery, failed to increase enough and imbibe positive market sentiment. Only leading four steelmakers were in a position to book scrap and sell steel products. A leading steelmaker in Chattogram bought several containers to restock the material before operations resume at its newly installed electric arc furnace. The steelmaker had postponed the commencement of operations at this site due to the COVID-19 affecting domestic demand negatively.   

The weekly index for domestic billet settled at BDT41,000/mt ($484/mt) ex-works Chattogram on Friday. Trades started to pick up further with expectations of rains taking a break in the coming days. 

Major steelmakers in Chattogram are offering discounts of their rebar to boost trades as they resume operations. Rebar from large steel producers was offered at BDT56,000-56,500/mt ex-works Chattogram. 

The weekly Davis Index for rebar from medium steelmakers settled at BDT50,750/mt ex-works, down by BDT500/mt from the prior week, inclusive of VAT. Rebar by small-scale producers traded at BDT49,000-49,500/mt ex-works, down by BDT800-1000/mt from the prior week.


Domestic and shipbreaking scrap

In the shipbreaking market, scrapped ships were offered at $350-360/ldt cfr Chattogram, unchanged from the prior week. After a month of strong demand, deals slowed down this week. Domestic prices could thus come under pressure in the coming days, a steel mill owner said.

The weekly Davis Index for HMS 1&2 (80:20) was unchanged at BDT29,750/mt ex-yards Chattogram inclusive of local taxes. Trades were reported at BDT29,500-30,000/mt ex-yards Chattogram. The Davis Index for shipbreaking scrap equivalent to P&S settled at BDT30,500/mt ex-yard, flat from the prior week. By the weekend, offers could increase further amid rising imported scrap on global cues.




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