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

Bangladeshi steel mills increased inquiries for ferrous scrap on Monday despite thin offers due to winter break in supplier countries. Depleting inventories and rising domestic scrap prices pushed mills to seek imported scrap. All indications are in favor of an upward rally in imported scrap prices leading to buyers losing patience. European lockdowns due to a new strain of COVID-19 and a shortage of containers have further increased freight costs to Bangladesh.  


The daily Davis Index for containerized shredded, Monday, settled at $474.64/mt cfr Chattogram, up by $3.93/mt from Thursday. There were hardly any offers from the US, Europe and Australia as most yards are away on account of the New Year’s Holidays. Trades are expected to resume only after Jan 4. A few indications on Monday were above $480-485/mt cfr Chattogram as Turkish bulk prices hit almost a 9.5-year high.


Amid rising domestic steel prices, Dhaka-based mills resumed trades on Monday. A deal for 500mt of mix #1 HMS and P&S heard at $490/mt cfr Chattogram on Monday as prices rose $10-15/mt from the prior week.  


The Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $462.14/mt cfr Chattogram, up by $5/mt from Thursday. Post-New Year’s Holidays, there could be a strong domestic demand in the US lifting scrap prices higher, said yard owners who are not ready to offer any materials now. The international shortage of raw materials has pushed Pig iron prices up by $40-50/mt last week in the CIS and Black Sea region, which will in turn support imported ferrous scrap prices, said a trader. 


For Asian bulk buyers, a few suppliers quoted $510-520/mt cfr Chattogram for US-origin mixed HMS 1&2 (80:20) following a sharp rise in the Turkish market. While Japanese suppliers were less interested in the Bangladesh market amid stronger demand from Taiwan and Vietnam.


The daily index for Latin America-origin HMS 1&2 (80:20) Monday rose $7/mt to settle at $462/mt cfr Chattogram. Offers for mix HMS #1 and P&S were very limited in absence of suppliers.  


Domestic billet prices up  

Following a successive rise in imported scrap prices, domestic billet prices increased in Bangladesh. On Monday, billet producers offered at BDT51,000-52,000/mt ($601-612/mt) ex-works Chattogram, up BDT1,500-2,000/mt from last week.


Large-scale rebar makers are attempting to raise offers to pass higher input costs. Prices for rebar heard at BDT62,500-65,000/mt ex-works. On Monday, BSRM and AKS steel mills offered rebar at BDT65,000/mt and BDT64,000/mt. Large mills indicate that rebar prices should be around BDT70,000/mt ex works to maintain their usual gap between scrap and rebar spread. 

A few medium and small-scale makers are selling billets and rebars at discounted rates despite losses to keep their operations running. These mills could cut production again if the market situation remains tight.


Ship scrap equivalent to P&S rose by BDT2,000-2,500/mt from the prior week following global cues and tight supply. Yards offered ship breaking scrap at BDT42,000-42,500/mt ex-works. Domestic HMS 1&2 (80:20) offered at above BDT40,000/mt ex-yards Chattogram. The cost of construction has gone up sharply in Bangladesh forcing contractors to opt for non-branded materials over TMT, thereby reducing the market share of rebar producers.


($1= BDT84.84)


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