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Ferrous market update: Aug 31-Sept 4, 2020

Turkey

  • The daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) climbed by $0.48/mt on Friday as new deals were reported without significant change in prices.
  • Several deals were reported in Turkey as ferrous scrap buyers were active. HMS 1&2 (80:20) from the USA and the Baltic region changed hands at $299-300/mt cfr.
  • Sellers are bullish as business activity has revived in the domestic markets and prices have increased significantly in September.
  • Suppliers believe that demand in Turkey will remain solid for October shipment after active steel product (rebar, billet, and wire rod) sales in late-August – early-September. Offers from the USA and the Baltic region were reported at $305-310/mt cfr for HMS 1&2 (80:20).
  • This week, billet sales were reported in the Turkish domestic and export markets in addition to several rebar and wire rod sales that were reported by Davis Index earlier. A mill was heard to have sold a large cargo of semis (around 40,000mt) to Peru at $426/mt fob. In the domestic market, billet sales were reported at $432-433/mt ex-works during this week.
  • Daily domestic rebar spot prices in Turkey were unchanged at TRY3,980-4,020/mt ex-works, including 18pc VAT, on Friday. Exported rebar prices in Turkey moved to $455-460/mt fob on Friday compared with $450-460/mt fob on Thursday. ($1 = TRY7.45)

 

Turkey domestic

  • The weekly Davis Index for Turkish DKP scrap rose by TRY59/mt ($8/mt) and increased by TRY50/mt ($7/mt) for extra grade scrap.
  • Most Turkish mills raised purchase prices for domestic ferrous scrap amid better demand for it and because of higher prices for imported material. Moreover, steel product prices increased at the end of August.

 

CIS

  • The weekly Davis Index for HMS 1&2 (80:20) from Russia rose by $5/mt on Monday amid better demand.
  • Turkish mills, the largest ferrous scrap importers in the world, resumed purchases at the end of August for September and October shipments and accepted higher prices.
  • Collection prices continued their uptrend in the Russian market due to slow inflow. The weekly Davis Index for HMS 1&2 (80:20) rose by RUB175/mt ($2/mt) in St Petersburg dock on Monday and by RUB200/mt ($3/mt) in Rostov-on-Don dock. ($1 = RUB74.08)

 

Europe

  • The weekly Davis Index for HMS 1&2 (75:25) in the ARAG region increased by €5/mt ($6/mt) on Tuesday amid an uptrend in the export market.
  • Collection prices for ferrous scrap rose in Europe as suppliers achieved higher prices in sales to Turkey. Most exporters increased offers further this week in anticipation of Turkish mills purchasing cargoes for October shipment. (€1 = $1.20)

 

UK dockside

  • Davis Index’s weekly north and south UK HMS 1&2 (80:20) ferrous scrap indices both climbed £5/mt ($7/mt) delivered dockside, on Tuesday.
  • Some large UK bulk ferrous scrap processors had to pay higher dockside prices this week to secure sufficient volumes as they were caught relatively short of material.
  • While Davis Index’ Turkish HMS 1&2 (80:20) import benchmark increased by $9/mt to $290/mt cfr over the same period, relatively few if any cargoes were booked from UK suppliers. Davis Index believes those British bulk exporters have paid up to secure volumes in anticipation of achieving even higher prices in the seaborne market in the coming weeks.
  • UK market participants also noted that the 2.3pc appreciation of the pound against the US dollar exacerbated the squeeze on margins.
  • The weekly indices for north and south UK OA (Plate & Structural) both increased by £7/mt delivered dockside on Tuesday.
  • Davis Index’s north and south UK 5A/5C (frag feed) ferrous scrap indices both held unchanged over the same period. (£1 = $1.34)

 

Spain

  • Davis Index’ weekly northern Spain HMS 1&2 (80:20) and shredded small bulk ferrous scrap indices edged €3/mt ($4/mt) lower on Friday.
  • Few, if any, new seaborne transactions to Spain have been recorded over the past week, though Spanish buyers were understood to have reduced their bids by €5/mt.
  • More recently, however, one bulk ferrous scrap trader commented that domestic E3 ferrous scrap grades had increased €10/mt to €220-225/mt over the past week in response to robust orders.
  • While E3 grades are priced on ‘delivered to mill’ basis, import scrap prices are on a cfr basis and need to be transported to the plant at an approximate cost of €5/mt.
  • With the recent strength in domestic and major seaborne ferrous scrap benchmarks, it is unlikely that Spanish mills could realistically maintain their bids at these low levels.
  • Davis Index’ UK small bulk ferrous scrap HMS 1&2 (80:20) and shredded nudged €4/mt.
  • Looking forward, Davis Index calculates that Spanish HMS 1&2 (80:20) ferrous scrap import tags could increase up to €240-250/mt, cfr northern Spain, in response to robust hikes in the UK and EU dockside purchase prices. (€1 = $ 1.19)

 

Spain domestic

  • The monthly Davis Index of Spanish consumer ferrous scrap increased by €10/mt ($12/mt) following the conclusion of recent deals in early September.
  • Spanish steel producers have been leaning heavily on local ferrous scrap supplies in recent weeks given the significant arbitrage between domestic and seaborne benchmarks.
  • As a result of healthy supply availability domestic E3 benchmarks traded at a €10-15/mt discount to HMS 1&2 (80:20) imports over the past month.
  • More recently, however, one bulk ferrous scrap trader noted that domestic scrap grades had increased by €10/mt over the past week in response to the robust consumption of local supplies.
  • As a result, this has significantly reduced the domestic E3 ferrous scrap grade discount to seaborne imports of HMS 1&2 to €2/mt in early September from €10-15/mt the prior month.
  • The Davis Indexes for E1 (old thin), E3 (old thick), and E40 (shredded) increased by €10/mt across all grades delivered to mill, respectively. (€1 = $ 1.19)

 

US domestic

  • September’s ferrous scrap trading settled on Friday with primes and secondary materials settling at increases of $20-40/gt and $30-50/gt compared to early August contracts.
  • Some springboard deals, mostly for shredded material, were priced at increases of $50-70/gt above August levels given the additional freight.
  • Detroit was one of the least aggressive markets settling at price increases of $20/gt for primes, $30/gt for cut grades, and $40/gt for shredded material, while primes were generally up $30/gt in Chicago with secondary material up $40/gt, against August settled prices.
  • Mills outside Detroit reportedly purchased ample tonnages compared to last month on the growing demand for shredded scrap. Many consumers trying to get the volumes they needed for the grade paid up to $300/gt for remote packages—about $20-30/gt above local Midwest delivered numbers.
  • Shredded in Chicago traded at about $275-240/gt delivered to consumer with HMS 1&2 (80:20) transacting at $235-240/gt delivered.
  • Markets near the East Coast were weaker than others, despite export strength, as some domestic area mills had lower buying needs. In Philadelphia, shredded traded at $285-290/gt delivered US consumer, gaining on #1busheling at $280-285/gt delivered, while HMS 1&2 (80:20) traded around $250-255/gt delivered.
  • The South and Southeast reaped the highest gains with most deals transacting at increases of $40-50/gt across all grades. The exception was the Carolinas that increased $30-35/gt across all grades as mills did not wish to concede to increases beyond the initial offer points.
  • Purchases for HMS 1&2 (80:20) were at $290-305/gt delivered with wide transaction levels on #1busheling in the Arkansas market at $300-340/gt delivered to consumer and shredded at $290-335/gt delivered. In Texas, grades increased by $35-40/gt across all grades.
  • Market participants are speculating that the upward price momentum experienced in September trading will likely carry forward into the next month as US mills continue strong buying programs. The expectations for October range from sideways to up $10-20/gt against September settled prices.
  • Mills reacted to higher demand on steel center restocking and higher automotive activity, but all sources point to the fundamental need for finished steel goods demand to begin to increase in Q4 2020 to sustain additional gains in scrap prices. The September scrap increase is supporting recent price announcements by mills of up $40-50/nt on flats, plate, tube, and rebar.
  • Moreover, several scrap yards expressed that they expect better scrap feedstock flows in September compared to their recent August experience reducing pressure on the supply side.

 

US dockside

  • US East Coast and Houston dock collection prices for ferrous scrap increased further amid reduced material flows, sustained export demand, and imminent domestic scrap trading.
  • Collection prices along the East Coast and Houston ranged from $225-240/gt on Tuesday for HMS 1&2 (80:20), representing an increase of about $5-15/gt compared with sales from last week, and an increase of around $15-25/gt from a month ago on August 4.
  • Dockside prices on the East Coast and Houston are projected to rise further, following domestic trade settlements next week.
  • In Boston, the weekly Davis Index for export yard HMS 1&2 (80:20) increased by $9/gt, P&S 5ft climbed by $10/gt, while shredder feed rose by $8/gt.
  • The weekly Davis Index for export yard buying prices in New York moved up by $9/gt for both HMS 1&2 (80:20) and P&S 5ft, while shredder feed increased by $11/gt.
  • In Philadelphia, the indexes for export yard collection prices of HMS 1&2 (80:20) rose by $12/gt, while P&S 5ft increased by $9/gt. The index for shredder feed climbed by $12/gt.
  • The weekly Davis Indexes increased by $8/gt for HMS 1&2 (80:20) in Houston and rose for P&S 5ft by $7/gt. Shredder feed increased by $8/gt.
  • On the West Coast, ferrous scrap dock prices increased in Portland and San Francisco but were unchanged in Los Angeles. Contrary to buyer expectations, prices have firmed up over the last few weeks due to continued interest in imported scrap.
  • South Asian destinations continued purchasing scrap on expectations of continued demand recovery. Given the regional trends in Asia, countries like Vietnam, South Korea, and Taiwan also remained active in the import scrap market.
  • Japanese ferrous scrap export prices firmed up after the higher Kanto bids earlier in the month resulting in Vietnamese billet suppliers turning to scrap from the US for lower-priced bulk. On the other hand, as Japanese and US prices for export have increased, buyers are seeking cheaper, alternative bulk sources, especially in the local or regional markets resulting in domestic prices rising in Vietnam, Thailand, Taiwan, and South Korea.
  • The weekly Davis Indexes in Portland increased alongside domestic mill increases with HMS 1&2 (80:20) rising by $25/gt, and both P&S 5ft and shredder climbing by $21/gt.
  • Scrap prices in Portland increased after mills in the Pacific Northwest raised domestic buying prices by $20-25/gt against August settled prices.
  • In San Francisco, the weekly indexes increased for both HMS 1&2 (80:20) and P&S 5ft by $7/gt, and shredder feed rose by $9/gt to $160/gt delivered.
  • The weekly Davis Indexes in Los Angeles remained unchanged for HMS 1&2 (80:20) and P&S 5ft. Shredder feed also held at the prior week’s levels. Sources report that some sellers began to receive the price increases last week.

 

US containers

  • US containerized ferrous scrap indexes were mostly rangebound on the East Coast and West Coast on Thursday as some buyers withdrew from higher-priced offers and those that remained sought scrap inventories at close to unchanged levels.
  • Gains were achieved last week but buyer indecision returned this week amid increasing domestic and global scrap prices.
  • Sellers on the West Coast expected scrap prices to rise by $10-15/mt on containers this week and anticipate a further rise due to the increase in dock prices, bulk export prices, and tight scrap inventories. Buyers who were tentative about purchasing early in September are expected to return to firm higher prices in the second week of the month.
  • The bulk market received increased support on continued strong sentiment due to higher Turkish import scrap prices that are approaching $300/mt cfr Turkey for HMS 1&2 (80:20), continued tight scrap inventories globally, and bulk demand from Asian countries.
  • The weekly Davis Indexes in New York decreased or remained unchanged on Thursday with #1 busheling, HMS1&2 (80:20), and machine shop turnings all declining by $1/mt. P&S 5ft and shredded remained unchanged.
  • In Los Angeles, the Davis Indexes increased marginally with #1 busheling up by $2/mt while HMS 1&2 (80:20) was flat. The index for P&S 5ft rose by $3/mt and shredded increased by $1/mt.
  • Asian buyers are showing an appetite for scrap and are concerned over increasing prices that may not be realized at the finished steel sales levels in their domestic markets. Despite the uncertainty, sellers report that yards have limited scrap inventories through next month, unlike the past years when some yards stockpiled their scrap.
  • Higher domestic scrap demand by the US, Japanese, and CIS mills will place pressure on domestic inventories and further support export scrap prices.
  • The Davis Indexes in San Francisco remained unchanged after last week’s $7-9/mt increase for #1 busheling, HMS 1&2 (80:20), and shredded. P&S 5ft climbed by $1/mt.
  • The weekly Davis Indexes in Seattle increased for most grades with #1 busheling rising by $6/mt alongside P&S 5ft, which increased by $4/mt. Shredded climbed by $6/mt. HMS 1&2 (80:20) was the only grade to decline, slipping by $2/mt as buyers favored the better grades.

 

Mexico

  • Domestic ferrous scrap prices pushed higher in Mexico on demand that has strengthened over the past one month.
  • Ferrous scrap prices in the three Mexican regions—North, Bajío, and Central—rose between MXN150-200/mt ($7- $9.2/mt) from last week amid improving scrap flows.
  • The construction and automotive industries in the regions are ramping up their production, adding to the demand for scrap.
  • In Northern Mexico, the weekly Davis Index for both HMS 1&2 (80:20) and P&S 5ft increased by MXN63/mt. The index for #1 busheling also climbed by MXN63/mt as did machine shop turnings. Shredded rose by MXN150/mt.
  • HMS 1&2 (80:20) and #1 busheling in Bajío increased by MXN13/mt, while shredded rose by MXN75/mt. P&S 5ft and machine shop turnings declined by MXN87/mt.
  • In Central Mexico HMS 1&2 (80:20) and machine shop turnings climbed by MXN100/mt. P&S 5ft increased by MXN75/mt with #1 busheling and shredded rising by the same amount.

 

Japan  

  • Japanese ferrous scrap export prices continued to rise after the Kanto tender. Some deals for #2HMS, HS, and Shindachi were heard both on fas and fob basis.
  • The weekly Davis Index for #1 busheling (Shindachi) rose by JPY300/mt fas. The index for HS rose by JPY500/mt fas and settled up by JPY300/mt fob.
  • The index for HMS 1&2 (50:50) rose by $10/mt on Wednesday, on high bids. Bulk cargoes of Japanese H2 scrap were offered to Vietnam this week but no trades were reported.
  • The weekly Davis Index for shredded rose by JPY450/mt fas with few deals.
  • Suppliers raised offers for all scrap grades by around JPY500-1,000/mt from the prior week amid higher Turkish offers. Also, the shortage of domestic scrap in importing countries including South Korea, Taiwan, and Vietnam supported higher offers.
  • Tokyo Steel hiked scrap purchase prices for the fifth time in August, on Tuesday. The steelmaker raised purchase bids by JPY500/mt delivered to all its steelworks, effective Wednesday. Japanese domestic scrap prices have hit a three-month high amid a shortage of material. ($1=JPY105.80)

 

South Korea  

  • Hyundai Steel held its bids for Japanese #2 HMS fob and HMS1&2 (50:50) fob. Bids for busheling (shindachi) were raised by JPY500/mt.
  • The weekly Davis Index for containerized HMS 1&2 (80:20) settled unchanged cfr South Korea. Mills preferred to buy bulk over containerized scrap and limited trades were heard at the index price.
  • South Korean mills expect Japanese export prices to rise aided by strengthening Japan domestic scrap market where ferrous scrap prices increased by around JPY1,000-1,500/mt on Wednesday. The weekly index for shredded rose by $1/mt cfr South Korea.
  • South American suppliers offered HMS 1&2 (80:20) $5-10/mt higher prices from the prior week. But mills were keen on lower-priced Russian bulk scrap and domestic scrap. A deal for Russian A3 scrap was heard cfr South Korea late last week.
  • The index for US-origin shredded and P&S 5ft rose by $7/mt and $6/mt, respectively, with no trades heard.
  • A mill was heard to have bought Japanese H2 on fob basis, while deals for H2 of other origins were heard on cfr basis.
  • Ferrous scrap prices continue to rise in most Asian markets amid tight supplies. Tokyo Steel raised its scrap purchase bids Tuesday by JPY500/mt ($4.7/mt) delivered to all its steelworks. The company had hiked scrap bids by JPY1,000/mt last week on Thursday. Mills raised their bids for domestic ferrous scrap in Korea from a week ago.
  • The Davis Index for domestic Heavy A delivered Incheon and Pohang rose by KRW10,000/mt, with deals at the index price on Wednesday. The weekly Davis Index for domestic Light A rose by KRW10,000/mt delivered Pohang mill. Limited trades for the grade were reported at the index level.

 

Taiwan  

  • In Taiwan, ferrous scrap offers rose this week despite thin trades. The daily Davis Index for containerized US-origin HMS 1&2 (80:20) was up by $1/mt on Friday. The index rose by $6/mt from the previous week as suppliers hiked offers after the Kanto tender.
  • Taiwanese mills are avoiding high volume US-origin scrap purchases and instead opting for lower-priced South American scrap. The uptick in the Turkish scrap market has also impacted Taiwanese bulk deals. Due to high offers from Japan and the US, Taiwanese mills have reduced their overall scrap purchases and no bulk deals concluded this week.
  • Few deals were heard for US-origin HMS 1&2 (80:20) in the containerized market. Mills preferred buying domestic scrap or delaying purchases. The weekly Davis index for containerized P&S 5ft fell by $2/mt this week. An early week deal for Venezuelan HMS 1&2 (80:20) was heard.
  • The index for weekly shredded rose by $3/mt on Thursday from the week prior and by $8/mt from Aug 13 on higher offers. No trades were heard. Few deals for #1 HMS from South America concluded on Monday at the index price.
  • Feng Hsin raised domestic ferrous scrap purchase price during the week. The Davis Index for domestic HMS 1&2 (80:20) in South and North Taiwan, Tuesday, rose by NT$300/mt delivered mill, respectively.
  • Market participants expect Taiwanese mills to raise purchase prices in the next week or two, but for now, prices remain unviable against the current finished steel demand in the domestic market. Many mills canceled discounts on rebar base offers to pass on partial input cost hikes to end buyers.

 

China

  • The weekly Index for HMS 1&2 (80:20) settled at down by CNY20/mt. Shagang Steel kept its rebar prices unchanged for late August shipments.

 

Vietnam 

  • In the containers market, the weekly index for HMS1&2 (80:20) rose by $7/mt cfr on Thursday from the prior week and up by $11/mt from Aug 13. The weekly index for #1 busheling rose by $6/mt cfr on higher offers, while the index for shredded rose by $9/mt cfr. Some deals for US-origin P&S 5ft were heard this week.
  • A deal for containerized HMS1&2 (80:20) from the USWC was heard at $260/mt this week. In the bulk market, few US-origin HMS 1&2 (80:20) deals were heard early in the week.
  • Shortage of domestic scrap and expected high demand for finished steel in September are expected to drive scrap bookings, said mill owners.
  • The domestic weekly Davis Index for HMS 1&2 (80:20) rose by VND58,333/mt delivered South Vietnam, inclusive of taxes amid higher offers. Domestic demand in Vietnam is yet to improve due to the pandemic. Importers adopted a wait-and-watch approach as scrap prices continued to rise in the international market. Limited bulk deals have concluded since last Tuesday.
  • Vietnamese billet suppliers kept offers firm for October and November shipments on high imported scrap prices. ($1= VND23,189.72)

 

Indonesia

  • Indonesian mills were cautious of not buying ferrous scrap at high prices. The weekly Davis Index for HMS 1&2(80:20) fell by $10/mt cfr on lower bids. Market participants said most offer prices are too high given the demand slump in the domestic market.
  • Steel mills from Indonesia raised offers for steel billets cfr Philippines amid high raw material cost. Mills are expecting demand to improve next week, but for now, are focusing on lower-priced scrap.
  • The Davis Index for shredded fell by $5/mt this week due to low bids. No trades were heard for the grade. The index for #1 HMS fell by $3/mt.

 

Thailand

  • The weekly Davis Index for domestic HMS 1&2 (80:20) inched up by THB200/mt on Wednesday, delivered Rayong mill inclusive of taxes, with trades at the index price. Mills preferred domestic material over imports amid bullish offers from most suppliers.
  • In seaborne markets, no trades were heard for US-origin containerized HMS 1&2 (80:20), cfr Thailand.

 

Malaysia 

  • The weekly indexes for HMS 1&2 (80:20) were flat delivered both western and eastern mills inclusive of taxes. Trades were limited but at the index price. Market participants expect finished steel demand to pick up in September and October. ($1=MYR4.17)

 

India Imports

  • Indian steel mills resisted the sudden rise in imported scrap offers through the week but an anticipated recovery in auto demand in September kept buyers optimistic. A sharp hike in steel prices has impacted small- and medium-scale manufacturers in India. This has led to a demand for regulation on steel prices by various industrial associations.
  • After a pause, SE Asian importers have raised bids for Indian billets by $10/mt cfr Philippines, and China-based importers also raised bids.
  • In the bulk market, ferrous scrap bids lagged by $10/mt than current offers from the US West Coast cfr Kandla on weak finished steel demand.
  • The index for containerized shredded Friday settled cfr Nhava Sheva up $3/mt from Thursday and up by $8/mt from the prior week. Offers on Friday were up $10-15/mt cfr Nhava Sheva amid tight supply. Leading primary steelmaker RINL raised finished steel prices by Rs500-800/mt on Friday, this triggered some buyers to procure at higher offers.
  • The Davis Indexes for containerized HMS 1&2 (80:20) cfr Nhava Sheva, rose by around $5-10/mt from the prior week. Some trades from Australia, UAE, and South Africa-origin supported were reported this week. The strengthening rupee could encourage buyers to increase purchase volumes in the next few weeks.
  • The weekly indexes for higher grade scrap like busheling and P&S in containers rose $8 and $5/mt from the prior week. Trades for higher grades scrap, albeit limited, recovered as Indian buyers returned to the market with fresh bookings. ($1=Rs73.3)

 

India domestic

  • The index for domestic HMS 1&2 (80:20) rose by Rs600/mt del Mandi Gobindgarh mill from the previous Friday. Prices rose on the back of supply scarcity and a rise in finished steel prices.
  • Secondary mills in North India state that lack of demand is unlikely to support this price raise. The daily index for HMS 1&2 (80:20) was unchanged delivered mill on Friday.
  • In the Mumbai market, the index rose by Rs550/mt del mill in a week.
  • Although major primary mills in the country have raised steel prices, secondary steelmakers doubt sustainability since downstream demand is still under pressure.
  • With the Indian government gradually easing pandemic restrictions, construction activity is expected to gain momentum. As the Diwali festival in November closes in, demand for automobiles is also expected to rise giving flat steel trades a push.

 

Pakistan  

  • Pakistani ferrous scrap importers have resumed activities in tandem with rising production on indications of strengthening global scrap markets. Supply of imported scrap to Pakistan remained tight while mills adopted a wait-and-watch approach amid limited end-user demand.
  • The Davis Index for containerized shredded cfr Port Qasim rose by $6/mt from the prior Friday. Pakistani mills resisted high offers caused by a $10/mt jump in Turkish bulk imported scrap prices this week.
  • The Davis Index for HMS 1&2 (80:20) from UAE cfr Port Qasim rose by around $7/mt from a week ago. A few containers of UAE-origin super scrap or a mix of #1 HMS and P&S 5ft traded cfr Port Qasim.
  • The index for US-origin HMS 1&2 (80:20) cfr Port Qasim rose by $1/mt from Thursday and $8/mt from a week ago.
  • The Davis Index for P&S 5ft and busheling both increased by $4/mt cfr from the prior week. Trades for both grades were customized as per mills’ requirements.
  • Domestic steel prices remained flat to up in Pakistan. On Friday, the weekly Davis Index for commercial Bala billet was flat ex-works Punjab from the prior week. Buyers purchased thin volumes due to a cash crunch. The weekly Davis Index for G-60 rebar ex-works Karachi rose by PKR250/mt. Heavy rains reduced rebar trades.
  • High imported scrap prices pushed domestic Pure Q toke scrap (equivalent to shredded) up by PKR300/mt from early this week. ($1=PKR165.6)

 

Bangladesh

  • Bangladeshi steel mills bought limited containers of imported scrap this week. Steelmakers are being cautious about booking more material before end-user demand returns to pre-COVID-19 levels. Despite the subdued sentiment, imported bulk scrap offers rose by $10-15/mt from the prior week.
  • The Davis Index for containerized shredded cfr Chattogram rose by $2/mt from Thursday and was up by $1/mt from the prior week. A few deals for the UK and Australia-origin shredded reported this week at higher prices. Most infrastructure projects have resumed, and demand is expected to normalize after mid-September with mills becoming 100pc operational.
  • Indian sponge iron offers to Bangladesh rose by $10-15/mt in line with higher imported scrap prices making it less viable this week.
  • A few container trades for South American and South African #1 HMS cfr Chattogram were reported. Brazilian suppliers offered very limited material in the export market amid strong domestic demand. The Davis Index for Australian HMS 1&2 (80:20) cfr Chattogram rose by $4/mt from the prior week.
  • Domestic steel demand though on a path to recovery, failed to increase enough and imbibe positive market sentiment. Only the four biggest steelmakers were able to book scrap and sell steel products. A leading steelmaker in Chattogram bought several containers to restock material before operations commence at its newly installed electric arc furnace.
  • The weekly index for domestic billet settled flat ex-works Chattogram on Friday. Trades started to pick up amid expectations of rains taking a break.
  • Major steelmakers in Chattogram are offering discounts to boost rebar trades as they resume operations. Rebar by small-scale producers traded down by BDT800-1000/mt from the prior week.
  • In the shipbreaking market, after a month of strong demand, deals slowed down this week. The weekly Davis Indexes for HMS 1&2 (80:20) and shipbreaking scrap equivalent to P&S were unchanged from the prior week. By the weekend, offers could increase further amid rising imported scrap on global cues. ($1=BDT84.71)

 

Metallics

 

CIS 

  • The weekly Davis Index for CIS basic pig iron increased by $7/mt on Friday on sales to China along with an uptrend in the global ferrous scrap market and tight supply of the material.
  • Sellers from the CIS achieved further price increase amid deals with Chinese buyers, who remained active in the market.
  • A Russian supplier sold 50,000-55,000mt of the material fob Black Sea at $385/mt cfr China for November shipment, while another Russian exporter sold a large cargo at $389/mt cfr for an earlier shipment. A supplier from Far East Russia closed a deal at $389/mt cfr for 15,000mt of pig iron.
  • The weekly Davis Index for CIS pig iron in Italy rose by $11/mt on Friday as business activity resumed.
  • Offers from the CIS were heard at $370/mt cfr and bids from Italian buyers were at $360/mt cfr as negotiations revived. According to market participants, some deals have been fixed closer to the upper end of the mentioned range, but further details were not available.
  • Pig iron sales from the CIS to the USA were also reported this week, but they were done at the end of August. Specifically, a Ukrainian exporter sold around 125,000mt of the material in total, though prices varied from $360/mt cfr New Orleans to $370-375/mt cfr Great Lakes.

 

US

  • The weekly Davis Index for basic pig iron (BPI) increased by $7/mt cfr New Orleans on Thursday after fresh sales concluded in the US within the past week.
  • A US consumer imported a couple of cargos of BPI from the CIS following about two months of increasing offer prices that have been met with inactivity.
  • The most recent bookings to other locations from the CIS were reported at $385-389/mt cfr China, for December shipment, an increase of about $5-9/mt compared with last week’s deals. This transaction would be equivalent to $370-375/mt cfr Nola, indicating further price increase potential in the US.
  • Domestic ferrous scrap trading settled at price increases of $20-40/gt in the Midwest, depending on grade and specific location. The Southern markets settled at price increases as high as $40-50/gt, which is also putting upward price pressure on scrap alternatives such as BPI.
  • The Davis Index for nodular pig iron (NPI) imports remained unchanged as the US buyers report having adequate material with no new booking confirmed.
  • The current NPI price level is comparable to the latest sales from Brazil to China at $340/mt fob. That level would translate to around $390/mt cfr China, and with added freight would be around $420/mt cfr Nola. However, bids from the US for the material are under that range.
  • The weekly Davis Index for US hot briquetted iron (HBI) imports was flat. New offers or deals have not been reported for HBI as demand has been low.

 

India

  • The daily Davis Index for billet in Mumbai increased by Rs300/mt ($4.1/mt) from the previous Friday on higher imported scrap prices. The daily Davis Index for rebar remained flat throughout the week. Market participants expect construction demand to return in September as soon as monsoon subsides.
  • In Raipur, the daily index for billet was up by Rs200/mt ($2.73/mt) from the previous Friday. Prices fell early this week due to weak buying but notched up late in the week. The daily Davis Index for rebar was marginally up Rs100/mt ($1.36/mt) amid thin sales.
  • The daily index for ingot in Mandi Gobindgarh rose by Rs100/mt from the previous Friday tracking higher scrap prices while the index for rebar increased by Rs500/mt ($6.83/mt) on improved trades.
  • In Jalna, the bi-weekly index for billet rose by Rs400/mt ($5.47/mt) on Thursday from the prior week on higher local scrap and sponge iron prices. The index for rebar in Jalna remained flat on Thursday amid limited trades.
  • The daily index for ingot in Ludhiana rose by Rs200/mt ($2.73/mt) on Thursday from the prior week with a similar rise in local scrap prices.
  • In Durgapur, the Davis Index for rebar rose by Rs600/mt while the index for billets rose by Rs1,300/mt. Manufacturers revised prices of rebar to pass on the increase in raw material prices.
  • In the South, the index for rebar rose by Rs125/mt ex-works Chennai, while the index for billets rose by Rs500/mt.

 

Shipbreaking 

  • Shipbreaking scrap prices this week fell by Rs150-200/mt amid low demand from rolling mills. Heavy rains along the west coast of India have cut production and consumption of steel in the region. The index for HMS attachments and Melting declined by Rs150/mt ex-Alang on Friday compared to Aug 28.
  • Mills refrained from buying large quantities as demand from the end-user sectors is yet to pick up. The rising number of COVID-19 infections in India has also turned some mills cautious.
  • The index for 14Ani declined by Rs400/mt ex-Alang from the prior week. Demand for steel plates has also declined amid a halt in construction work due to monsoon. The index for 5kg plates declined by Rs150/mt this week.
  • Indian yards are losing a lot of scrapped vessel tonnages to Pakistan and Bangladesh due to high offers. Only vessels that are meant to be recycled under HKC norms are reaching Alang.

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