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

Softening ferrous scrap prices prompted Bangladeshi mills to step back from imported scrap bookings. Prices were pressurized by weak global cues despite an optimistic outlook among suppliers. Few traders sold material at $10/mt lower than current offers


Steel prices in China have remained volatile in the last couple of days, pushing mills to turn cautious on purchasing scrap tonnages. Slow domestic finished steel sales also discouraged mills from buying scrap at higher prices. To avoid losses from high raw material prices, many furnaces focused only on domestic melting and shipbreaking scrap. 


The daily Davis Index for containerized shredded, Wednesday, settled at $476.56/mt cfr Chattogram, down by $3.44/mt. Containerized shredded trades heard at $475-780/mt cfr Chattogram while the bids on Wednesday dropped to and below $470/mt cfr Chattogram following global cues. 


Traders who have booked scrap earlier are likely to sell off material before prices fall any further, while some traders raised offers for material scheduled to arrive soon.   


In the bulk market, post Wednesday’s Kanto tender in Japan mills wait for prices to drop to resume trades. Two mills participated in the Kanto tender however failed to secure materials losing them to Vietnamese buyers. 


The index for HMS 1&2 (80:20) from Latin America dropped to $451/mt cfr Chattogram, down $7/mt amid falling bids. Suppliers focused on domestic sales where prices are higher than in South Asia. Lack of supply pushed large Bangladeshi mills to opt for thin volume trades in containers from various origins including Africa, Malaysia, and Singapore.


The daily Davis Index for US-origin containerized HMS 1&2 (80:20) settled at $457.5/mt cfr Chattogram, down $2.5/mt. on Wednesday, containerized HMS 1&2 (80:20) sold in the range of $455-460/mt cfr Chattogram, down $5/mt from the prior day.


Domestic scrap continues to decline 

Amid increasing supply with domestic yards and active demand from buyers to secure easily available domestic scrap, prices for ship scrap equivalent to P&S dropped further on Wednesday to BDT41,500-42,000/mt ex-works. Most furnaces in Dhaka negotiated for domestic HMS 1&2 (80:20) at around BDT40,000/mt ex-yard Chattogram. 


On Wednesday, ship plates of 16mm size offered at BDT47,500-48,000/mt ex-yards, up BDT1,000-1,500/mt from a day ago, which is less likely to sustain, claimed traders. Supply from ship-breaking activities are expected to increase with most yards ramping up demolition.


Sellers are bearish ahead of Ramazan and Eid holidays in April-May. During the monsoons, finished steel prices usually decline by BDT5,000-7,000/mt on weak demand. Buyers could stay away from booking large volumes in the coming days.


Domestic billet prices stable at BDT54,500-55,500/mt ex-works Chattogram. Most government projects have delayed payment cycles resulting in cash flow issues for large mills. Exacerbating their woes are elevated raw material costs. 


Large steelmakers kept their asking rates for rebar unchanged at BDT67,000-67,500/mt ex-works, however, offered discounts of BDT500-1,000/mt to boost sales. Large mills have to compete with rebar produced from re-rollable scrap, which is available at BDT3,000/mt lower than their product. In the retail market, rebar from medium-scale mills and re-rollers traded at BDT63,000-63,500/mt ex-works. 



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