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

Imported ferrous scrap bookings in Bangladesh were impacted by the announcement of a week-long lockdown since Monday. The government has introduced strict social distancing measures until the midnight on April 11. Sentiment also turned bearish as domestic steel prices are expected to come under pressure once Ramadan starts. 


Ahead of Ramadan, most infrastructure projects ramped up their activities and could restock material to cater to the demand after the Eid holidays. But the lockdown could impact these projects.  


Containerized scrap prices have moved up in supplier countries. Thus, mills found it difficult to source material at prices workable for them. Shipping challenges like high freight charges and unavailability of containers also added to their woes. 


Workers are also set to travel back to their hometowns for the Ramadan festival, and the government could extend the lockdown period. But large-scale mills can afford better safety measures and transportation of workers resulting in a better workforce availability and limit the  impact on production. 


The daily Davis Index for containerized shredded, Wednesday, settled at $475/mt cfr Chattogram, up by $1.25/mt from Monday. UK-origin containerized shredded was offered at $480-485/mt cfr Chattogram, with buyers at $470-475/mt cfr Chattogram. 


A few yards in Latin America lowered their offers in the domestic market to encourage trades, however for exports, they kept asking prices firm amid vessel space crunch. The daily index for HMS 1&2 (80:20) from Latin America settled at $456/mt cfr Chattogram, up by $1/mt. The indices for US-origin, UK-origin, and Australia-origin containerized HMS 1&2 (80:20) settled at $464/mt, $452/mt, and $462/mt cfr Chattogram, respectively. Deals for HMS 1&2 (80:20) were at $455-460/mt cfr Chattogram pushing offers to $460-465/mt cfr Chattogram.


In the bulk market, offers for mixed cargo from the US West Coast were above $485-490/mt cfr Chattogram. Shredded cargoes were offered at prices above $495-500/mt cfr Chattogram on Wednesday following strong global cues. Turkish mills resumed bulk bookings for May and June shipments as they have secured massive 300,000mt rebar orders from Southeast Asian buyers.  


Billet prices under pressure

Following a sharp rise in the domestic and imported scrap prices, billet prices in Bangladesh remained elevated. On Wednesday, domestic billet offers were at BDT58,500-59,000/mt ex-works Chattogram. But demand is expected to weaken and pull prices down to BDT55,000/mt ex-works in the coming days, believe Dhaka- based mills. 

Southeast Asian billet offers were at $650-660/mt cfr with deals reported in China at these prices. 

Offers for ship scrap equivalent to P&S were BDT45,000-45,500/mt ex-yards. Domestic melting HMS 1&2 (80:20) traded unchanged at BDT44,000-44,500/mt ex-yard Chattogram. 

All large steelmakers kept asking prices for rebar unchanged at BDT68,000-69,000/mt ex-works after the price hike last week. Rebar from medium-scale mills was unchanged at BDT65,500-66,000/mt ex-works. 

Offers for scrapped ships surpassed $500/ldt, and most recyclers turned silent. Yards were cautious of buying heavy tonnages at these prices amid fears of a recession ahead. Shipbreaking plates of 16mm were offered on Wednesday at BDT52,500/mt ex-yards, unchanged from a day ago, but down from BDT54,000/mt late last week. 



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