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

Bangladeshi steel mills stayed away from imported ferrous scrap bookings due to heavy monsoon rainfall and extension in stringent national lockdown restrictions. The spread of the Delta variant of COVID-19 and an acute shortage of medical oxygen has prompted the government to extend the lockdown until July 14. 


Mills faced the dual challenge of a significant drop in domestic steel consumption and firm international raw material prices, especially for imported ferrous scrap. The supply of melting and rolling scrap is tight in Bangladesh, leading to a margin squeeze for mills. 


The daily Davis Index for containerized shredded settled down by $1.75/mt to $548.25/mt cfr Chattogram on Tuesday. Deals were scarce amid a wide disparity between offers and bids. Only a few bids were in the market at $530-540/mt cfr, which were below sellers’ expectations. 


The daily Davis Index for HMS 1&2 (80:20) from Latin America, Tuesday, was at $515/mt cfr Chattogram, down $1/mt. Deals for HMS 1&2 (80:20) from Brazil were at prices below $510-515/mt cfr Chattogram.

In a silent market, the daily index for US-origin containerized HMS 1&2 (80:20) settled at $526.25/mt cfr Chattogram, down $3.75/mt. The daily indexes for UK-origin and Australia-origin HMS 1&2 (80:20) were at $515/mt and $523/mt cfr Chattogram, both down $1/mt. 


Domestic market mute

The availability of domestic ferrous scrap reduced amid the lockdown. Offers for ship scrap equivalent to P&S settled at BDT49,000-49,500/mt ex-yards. For rebar, large-scale mills kept asking rates at BDT71,500-72,000/mt, ex-works. Mills were unable to offer any discount to boost sales due to low margins.


Yards could suspend cutting operations again due to lack of oxygen, further tightening the scrap supply. Barring a few government projects, demand from most end-users has slumped. Except for large mills, most furnaces are mulling production cuts to match weak demand in the monsoon season.




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