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

Imported ferrous scrap offers in Bangladesh were firm. But mills were not keen on these price levels. Only a few buyers were in the market after the Eid holidays. Some market participants believe it could take a week for the market activity to pick up pace amid extended lockdown to curb COVID spread. The government decided to extend the lockdown by another week until May 23.


Many shipbreaking yards remained shut due to the diversion of liquid oxygen for medical use and labor shortages. The free period for containers at the ports has also been lowered, which could impact imports.


On the other hand, steelmakers are running short of ferrous scrap inventories. Yards were interested in catering to bulk inquiries due to a shortage of empty containers.


The daily Davis Index for containerized shredded, Monday, settled at $542.5/mt cfr Chattogram, up by $3.75/mt from Friday. A few trades for containerized shredded from UK/EU were in the range of $540-545/mt cfr Chattogram. But bids were at $525-535/mt cfr Chattogram amid the possibility of a decline in offers driven by a drop in Chinese steel prices. Most offers were, however, above $550/mt cfr Chattogram.


The daily index for HMS 1&2 (80:20) from Latin America settled at $510/mt cfr Chattogram, up by $4/mt from Friday. Most Latin American yards kept offers firm amid active domestic demand. Increased freight and delays in deliveries of shipments due to reduced collections at yards impacted trading.


Bids for HMS scrap lagged by over $10/mt against offers, thus limiting deals. The indexes for US-origin, UK-origin, and Australia-origin containerized HMS 1&2 (80:20), Monday, settled at $519.29/mt, $512/mt, and $522/mt cfr Chattogram, up by $2/mt each. Offers continued to move up on short supply. Traders booked over 12,000mt HMS 1&2 (80:20) in containers ranging $510-515/mt cfr Chattogram. Trades for #1 HMS from the UK and Australia reported at $525-526/mt cfr Chattogram. 


Medium-scale mills have shown willingness to purchase ferrous scrap as they ramped up their production activities after the Eid holidays. For the next two weeks, there could be restocking of ferrous scrap before the Monsoon arrives in Bangladesh and slows the activity in the steel market.


For ship scrap equivalent to P&S, asking rates were at BDT47,000-48,000/mt ex-yards. Mills were interested in domestic melting scrap at BDT45,500-46,000/mt ex-yard Chattogram. Amid limited scrap inventories, sellers refused to lower offers, and mills accepted these price levels despite sluggish steel sales. Rebar price could rise by BDT5,000-6,000/mt as mills look to keep their spreads unchanged amid a rise in imported scrap and the resulting high input costs.




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