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

Bangladeshi steel mills aggressively restocked ferrous scrap both in containers and bulk cargoes amid depleting inventories and rising steel prices. A persisting shortage of containers and rising freight costs have incrementally raised offers. Buyers were highly inclined to secure materials before its move further up while many small-scale mills indicated stopping purchases and halting productions amid a cash crunch.  


A leading steelmaker bought an Australian bulk cargo of around 30,000mt with prices at $425/mt cfr for shredded scrap, $430/mt cfr for P&S 5ft, and $410/mt cfr for heavy melt. The deal raised Asian bulk prices by $25-30/mt from last bookings. Japanese #2 HMS offers were above $405-410/mt cfr Chattogram on Friday with no major deals.


The daily Davis Index for containerized shredded, Friday, settled at $425.96/mt cfr Chattogram, up by $22.10/mt from prior Friday and $7.5/mt from Thursday. Prices hit a new multiyear high. Earlier this week, UK-origin shredded in containers traded at $420-425/mt cfr Chattogram. Bids for shredded from the US, New Zealand and Australia heard at around $415-420/mt cfr Chattogram against offers of $425-430/mt cfr Chattogram.  


The Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $406.07/mt cfr Chattogram, up by $6.43/mt from Thursday and up $21.07/mt from a week ago. Very few offers were at $405-415/mt cfr Chattogram from Australia and the US, differing by quality. Some mills are avoiding imports from the US and UK due to delays in shipment amid tight vessel space.  


The daily index for Latin America-origin HMS 1&2 (80:20) settled at $401/mt cfr Chattogram up by $7/mt from Thursday and gaining $26/mt from Dec 4. Offers for Latin American mix HMS #1 and P&S rose to $405-410/mt cfr Chattogram, while a few containers were booked for the grade at $395-400/mt cfr Chattogram from Australia, New Zealand and Chile. Domestic markets in Latin America are firming up amid a recovery in steel demand, which is cutting down offers to Asian countries.


The weekly Davis Index for busheling, Friday, settled at $440/mt cfr Chattogram up by $20/mt from the prior week and $35-40/mt from early December. Early this week, Blue steel from Australia and the UK traded at $430/mt cfr Chattogram, subsequently, offers from the UK yards were at $435-445/mt cfr Chattogram on Friday.  


P&S scrap from the UK traded at above $425-430/mt cfr Chattogram with the index rising $20/mt from the prior week. Offers for P&S from Australia jumped above $420-430/mt cfr Chattogram on Friday.


Domestic steel demand recovers

High input costs lifted the weekly Davis Index for domestic billet, Friday, up by BDT750/mt to BDT49,500/mt ($584/mt) ex-works Chattogram with trades at the index price. Major steelmakers in Chattogram on Friday offered domestic billet at BDT49,500-50,500/mt ex-works as steelmakers cancelled discounts on most products. Many mills are facing a shortage of natural gas required for their operations.


The weekly Davis Index for rebar from medium-scale steelmakers settled at BDT58,250/mt ex-works, up BDT1,500/mt, inclusive of VAT. Large scale rebar makers like AKS and BSRM finally raised their prices to BDT61,000-62,000/mt ex-works. The index for large steelmakers’ rebar rose BDT1,000/mt from last Friday to BDT60,500/mt ex-works. Small scale rebar makers offered rebars at BDT54,000-55,000/mt ex-works. Amid cash crunch, mills could announce production cuts to balance the supply-demand mismatch and avoid high input costs.  


Domestic and shipbreaking scrap

Ship scrap equivalent to P&S rose in sync with a sharp rise in imported scrap prices. The weekly index rose BDT1,625/mt to BDT39,750/mt ex-yards on Friday. HMS 1&2 (80:20) was priced at BDT38,000-38,5000/mt ex-yards Chattogram. The weekly Davis Index for the grade settled at BDT38,500/mt ex-yards on Friday, up BDT1,750/mt. Offers for scrapped vessel imports rose above $430-450/ldt, up $30/ldt from the prior week amid delays in arrival due to seasonal concerns.  

($1= BDT84.68)


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