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

Bangladeshi mills with low inventories plan to restock next week. Few mills increased inquiries this week to buy actively post the winter break. Tightening supply of domestic scrap from shipbreakers have also prompted mills to resume trades for imported scrap. 


The daily Davis Index for containerized shredded, Thursday, settled at $470.71/mt cfr Chattogram, up by $3.57/mt. The index has gained $24.41/mt from Dec 18. Offers for containerized shredded from the UK and US yards are scarce. A few offers were above $475-480/mt cfr Chattogram on Thursday. 


Bids for UK-origin containerized P&S scrap heard at $475-480/mt cfr Chattogram with a few suppliers quoting $500/mt cfr Chattogram. The index for the grade rose $18/mt from the prior week to $472/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 $483/mt cfr Chattogram up by $18/mt from the prior week. Thailand-origin 1,500mt of NTP scrap sold at $470/mt cfr Chattogram. 


Japanese and Australian scrap suppliers could opt to stay away from the Bangladeshi market if Chinese buyers pay higher in January. On Dec 23, China discontinued 2pc import duty on ferrous scrap and reinstate most-favoured-nation (MFN) policy rates from Jan 1, 2021. Bangladesh mills now would have to look for other destinations for scrap.   


The Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $457.14/mt cfr Chattogram, up by $2.14/mt from Thursday. On Thursday, offers from Australia and the US heard at $465-470/mt cfr Chattogram.


The daily index for Latin America-origin HMS 1&2 (80:20) Thursday rose $2/mt to settle at $455/mt cfr Chattogram. Trades pushed the index up $32/mt from a week ago. Offers for Latin American mix HMS #1 and P&S rose to $460-465/mt cfr Chattogram. 


For Asian bulk buyers, a few US suppliers quoted $510-515/mt cfr Chattogram for mixed HMS 1&2 (80:20) following a sharp rise in the Turkish market. 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 rebound 

Domestic steel prices rebound after a correction early in the week. Tight supply and increase in input costs supported higher asking price for finished steel products. Ship scrap equivalent to P&S gained BDT1,000-2,000/mt over the week with offers at BDT41,000-42,000/mt ex-works. The weekly index for ship scrap equivalent to P&S jumped BDT2,750/mt to BDT41,000/mt ex-works. Domestic HMS 1&2 (80:20) offers heard at BDT39,500-40,000/mt ex-yards Chattogram on Thursday with the index up BDT2,000/mt from Dec 18.


Offers for scrapped vessel imports heard at $440-460/ldt, up $10/ldt from the prior week. Most ship buyers are in a mood to wait till prices correct. Also, the cost of construction has gone up sharply in Bangladesh, following high raw materials prices which could hamper infrastructure projects.  


The weekly Davis Index for domestic billet, Thursday, rebound by BDT1,000/mt to BDT49,500/mt ($585/mt) ex-works Chattogram. Domestic billet traded at BDT49,000-50,000/mt ex-works Chattogram, still behind global trends and many mills are attempting to further raise bids.


Large-scale rebar makers held offers to pass higher input costs. Rebar offers at BDT63,000-65,000/mt ex-works. The index for large steelmakers’ rebar rose BDT1,750/mt from last Friday to BDT64,000/mt ex-works. Mills saw strong resistance from buyers for rebar prices above BDT60,000/mt ex-works.


Small scale rebar makers offered rebars at BDT53,000-54,000/mt ex-works. The weekly Davis Index for rebar frm medium-scale steelmakers settled at BDT58,500/mt ex-works up BDT1,500/mt, inclusive of VAT. Amid cash crunch, mills could announce production cuts to balance the supply-demand mismatch and avoid high input costs. 


($1= BDT84.83)


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