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

Bangladeshi steel mills are in urgent need of imported ferrous scrap amid low inventory and tight domestic scrap supply, despite this most mills backed out from buying materials at record high prices and plan to wait until prices cool-off.  


The daily Davis Index for containerized shredded, Thursday, settled at $476.29/mt cfr Chattogram, up by $0.04/mt from Wednesday. Trades for shredded scrap paused this week as prices moved up $5.58/mt from a week earlier. Offers for containerized shredded from the UK and US yards were scarce and only above $480-485/mt cfr Chattogram on Thursday.  


Australian mixed P&S and shredded in containers sold at $470/mt cfr Chattogram. Most recyclers in the US, Europe and Australia would remain shut on account of the New Year holidays till Jan 4. A few traders with stocks in hand are keen to sell-off before prices lose steam amid slowing Chinese demand while most anticipate strong January market in the US mirroring hikes seen in this month.


Bids for UK-origin containerized P&S scrap lagged $10-15/mt against offers of $500/mt cfr Chattogram. The weekly index for the grade rose $10/mt from the prior week to $482/mt cfr Chattogram. Although offers have increased sharply, mills dependent on imported scrap and are waiting for suppliers to return after the New Year Holidays.  


The weekly Davis Index for busheling, Thursday, settled at $488/mt cfr Chattogram up by $5/mt from the prior week. A trader bought NTP grade at $470/mt cfr Chattogram.


Amid optimism on Chinese buyers to resume ferrous scrap trades, Japanese and Australian scrap suppliers could opt to stay away from the Bangladeshi market on higher realization in January. However, many industry participants claim it would take at least 2-3 months’ time to see the actual implementation of the new policy on the ground.  


The Davis Index for containerized HMS 1&2 (80:20) of the US-origin and Latin America-origin settled at $465.25/mt and $464/mt cfr Chattogram, rising by $8.1/mt and $9/mt from the prior Thursday. US suppliers are anticipating strong domestic demand in January and yard owners are hesitant in offering any material now. Offers for HMS #1 from Chile were around $465-470/mt cfr Chattogram on Thursday.


In the bulk market, there were no offers from Japan and Australia on account of holidays while a few US suppliers quoted $500-505/mt cfr Chattogram for mixed HMS 1&2 (80:20) following global cues. Bids lagged $10-15/mt as no-deal confirmed. European lockdown due to COVID-19 and a shortage of containers could cause international freight costs to jump, resulting in overall high landing costs.  


Domestic prices firm  

Domestic steel prices remained firmed over this week following global cues. Tight supply and increase in input costs supported higher asking prices for finished steel products. Ship scrap equivalent to P&S gained BDT1,000-2,000/mt over the week with trades at BDT42,000-42,500/mt ex-works. The weekly index for ship scrap equivalent to P&S jumped BDT1,500/mt to BDT42,500/mt ex-works. 


Domestic HMS 1&2 (80:20) offers were at BDT41,000-41,500/mt ex-yards Chattogram on Thursday with the index up BDT1,500/mt from Dec 24. Shipbreaking plates traded at BDT47,000-47,500/mt ex-yards.  


Domestic billet prices rose in Bangladesh as mills aim to pass high input costs to end-user. The weekly Davis Index for domestic billet, Thursday, gained further by BDT2,250/mt to BDT51,750/mt ($611/mt) ex-works Chattogram. Domestic billet traded at BDT51,500-52,000/mt ex-works Chattogram as mills are attempting to further raise asking rates.


The index for large steelmakers’ rebar rose BDT750/mt from last Thursday to BDT64,750/mt ex-works. Mills saw strong resistance from buyers for rebar prices above BDT60,000/mt ex-works. Offers of rebar were at BDT66,000/mt and BDT65,000/mt ex-works, up BDT1,000/mt from Monday. Large mills are targeting rebar prices at around BDT70,000/mt ex-works to maintain the spreads between scrap and rebar and to pass-on higher input costs.  


Small scale rebar makers offered rebars at BDT54,000-55,000/mt ex-works. The weekly Davis Index for rebar from medium-scale steelmakers settled flat inclusive of VAT. Amid cash crunch, mills could announce production cuts to balance the supply-demand mismatch and avoid high input costs.  


The cost of construction has gone up sharply in Bangladesh, following high raw materials prices. This coupled with the winter season could hamper infrastructure demand. In the shipbreaking market, despite rising vessel supply and flat offers of $430-450/mt cfr, yards are yet to increase booking volumes. Shipbreakers are expected to be active soon as they are short on inventory.


($1= BDT84.68)


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