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

Mills in Bangladesh continued to ramp up steel productions but steel sales in the retail markets were not very encouraging, which weighed on bids for imported ferrous scrap. Many construction projects put on hold due to the COVID-19 situation and monsoon rains are likely to gain momentum in the coming days. 


Amid very low buying inquiries for shredded, the daily Davis Index for containerized shredded, Friday, inched down by $2.5/mt to $537.5/mt cfr Chattogram. The index dropped by $12.5/mt from Aug 20. Bids dropped following discouraging steel sales at higher asking offers. 


Containerized freight rates stayed elevated at above $90.3/mt on New York to Chattogram port route. 


Except for a few mills, who are running out of scrap inventories, most buyers were silent and focused on liquidating their finished steel inventories on a priority basis. Active bookings and bulk inquiries are halted and could resume post-mid-September, believe participants. Many large mills are struggling with low credit limits with banks, which is hurting their import capabilities.


On Friday, Chinese steel prices were mixed, meanwhile, the market softened in Japan, with Tokyo steel lowering ferrous scrap bids by JPY500/mt ($5) and Hyundai revising bids another by another JPY1,000/mt ($9/mt) from the prior week.  


The daily index for US-origin containerized HMS 1&2 (80:20) dropped to $504/mt cfr Chattogram, down $3.5/mt from Thursday. The index dropped by $11/mt from prior Friday. The increasing availability of HMS in most supplier countries has weighed down prices, widening the gap between HMS and prime grades. 


The indexes for UK-origin and Australia-origin HMS 1&2 (80:20) settled at $500/mt and $505/mt cfr Chattogram, respectively, down by $8/mt and $13/mt from Aug 20. Buyers booked HMS in containers as prices dropped to match their expectations. 


The daily Davis Index for HMS 1&2 (80:20) from Latin America dropped to $495/mt cfr Chattogram, down $3/mt. The index dropped by $5/mt, as compared to last Friday as the market softened globally and importers lowered bids. 


From prior Friday, the Davis Index for P&S 5ft dropped by $9/mt to settle at $543/mt cfr, while the index for #1 busheling was at $558/mt cfr Chattogram, down $7/mt. Deals were very slow for higher grades.


Domestic steel prices drop on low sales 

The weekly index for ship scrap equivalent to P&S settled at BDT51,500/mt ($604/mt) ex-yards, down BDT500/mt. For ship plates, the asking price dropped to BDT56,500/mt ex-yards, down BDT2,500/mt from prior Friday. The weekly index for domestic HMS 1&2 (80:20), Friday, settled at BDT47,500/mt ex-yards Chattogram, down BDT500/mt.


The weekly index for rebar from large-scale mills declined by BDT250/mt to BDT73,000/mt ex-works. The weekly Davis Index for rebar by medium-scale was at BDT68,000/mt ex-works, down by BDT500/mt, and for small-scale mills, the index settled at BDT62,500/mt ex-works, down by BDT1,500/mt. 


The weekly index for billet was at BDT62,500/mt ex-works, down BDT500/mt. Finished steel supplies in Bangladesh have eased due to inventory pile-up during the lockdown. Due to this, buyers in the domestic market remained unwilling to import sponge iron from India. Overall, steel demand is likely to lag expectations and the recovery could take a bit longer than expected. 



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