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

Imported ferrous scrap prices in Bangladesh scaled to a four-month high amid strong global cues. Trades for shredded scrap have halted while a few large-scale mills restocked HMS scrap to maintain productions levels. COVID-19-related lockdown in Bangladesh will continue till May 16. Participants expect trades to resume next Monday post-Eid celebrations.


In anticipation of increased purchases after Eid and strengthening Chinese steel prices, offers are scaling new all-time high in Bangladesh. Suppliers are showing interest only in bulk inquiries, also the availability of containers has lowered drastically. The daily Davis Index for containerized shredded, Monday, settled at $512.5/mt cfr Chattogram, up by $7.5/mt. Suppliers from UK/EU offered containerized shredded at $515-520/mt cfr Chattogram but mills shied away from those levels. There were hardly any new offers for shredded from Australia and New Zealand.


Production cuts by automakers and the resultant reduction in generation of high-grade scrap like busheling have spiked offers. Busheling offers could rise above $580/mt cfr Chattogram as indicated by the US domestic market settlements for May.  


The daily index for HMS 1&2 (80:20) from Latin America settled at $483/mt cfr Chattogram, up by $3/mt. Most Latin American yards kept their offers for HMS 1&2 (80:20) above $480-485/mt cfr Chattogram on higher freight charges and active domestic demand, pushing the index up by $16/mt from prior Thursday.


For containerized HMS trades, Bangladeshi mills paid almost four month’s high prices. Offers rose as container freight remained firm for Bangladesh, despite a marginal correction for India and Pakistan. The gap between India and Bangladesh container freights on the New York to Nhava Sheva and Chattogram port was near to $28-30/mt. Average containerised freight was at $80/mt and $50-52/mt, respectively.


Amid tight supply and container shortage, globally, the daily indexes for US-origin, UK-origin, and Australia-origin containerized HMS 1&2 (80:20) moved to $491.25/mt, $485/mt, and $492/mt cfr Chattogram, up by $6.39/mt, $5/mt, and $5/mt, respectively.


On Monday, the Japanese electric arc steel mill Tokyo steel hiked ferrous scrap bids by JPY1,000-2,000/mt. Revised #2 HMS prices delivered Okayama are at JPY45,000/mt and for Utsunomiya works at JPY44,000/mt. Bangladeshi mills, despite Eid holidays, are thus waiting for the monthly Kanto tender scheduled for Tuesday, May 11. For shipbreakers, offers for scrapped vessels jumped above $530-540/ldt this week, with buyers refusing to accept these levels.


Medium-scale mills have cut production to match weak steel demand and the upcoming monsoon lull. Unable to manage their operations at full scale amid financial challenges and labour shortage, small-scale steelmakers have halted productions.


Domestic steel prices in Bangladesh are unchanged amid the suspension of trading ahead of the Eid holidays. Most large-scale mills target price hikes following an increase in scrap prices. Mills are planning to book scrap for June-July shipments but the arrival of monsoon could lower their appetite considerably.



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