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

Demand for imported ferrous scrap in India is impacted by 11 major states seeing a massive spike in COVID-19 infections. Varying degree of restrictions are in place in many cities and high-risk areas which could slow down economic activities in the coming days. 


Migrant labourers are rushing to their hometowns to avoid inconveniences if the government imposes stringent lockdown like last year. Construction activities and small-scale industries have started experiencing labour crunch despite assurances from the government that manufacturing and industrial activities will not be stalled. 


Scrap buyers preferred short delivery or high seas cargoes, while trading in long delivery periods remained almost paused. Most importers have adopted a wait and watch stance to gain more clarity on the domestic situation. 


Steel prices, globally, are charting new highs and could move further amid production curbs in China. Flat steel prices in India hit an all-time high after leading primary mills hiked prices in April. If demand sustains, there could be another round of price hikes as Indian mills look to fill the void left by the reduction in Chinese exports.


The daily Davis Index for UAE-origin HMS 1&2 (80:20), Friday, settled stable at $428/cfr Nhava Sheva. The index rose by $8/mt from the prior Friday. Dubai-origin HMS #1 traded at $435/mt cfr Nhava Sheva. Some offers heard at $440/mt cfr Nhava Sheva. Buyers in the three subcontinental markets competed to secure material from the region where supply is known to tighten during Ramadan. 


Bids for turning scrap heard at $390-395/mt cfr Nhava Sheva, up by $10/mt from a week ago. A few deals for West African HMS for 20-21mt loading with CI-GI at $390-400/mt cfr Goa. Mills stayed away from booking containerized P&S and #1 busheling. The indexes for P&S and #1 busheling were at $472/mt and $490/mt cfr Nhava Sheva, up by $10/mt from last week.


Offers for shredded in containers from the UK or Germany were above $460-465/mt cfr Nhava Sheva hitting a one-month high. The Davis Index for containerized shredded rose to $460/mt cfr Nhava Sheva, up by $1/mt from Thursday. The index for US-origin HMS 1&2 (80:20) Friday settled at $430/mt cfr Nhava Sheva stable from Thursday. Both the indexes rose $10/mt cfr from last week. 


On Friday, melting scrap offers in Alang rose Rs100/mt to Rs32,500-32,600/mt ex-yards. The spread of COVID-19 has forced workers to curtail operating hours, while many have travelled back to their hometowns amid uncertainty. Yards are also challenged by a shortage of oxygen cylinders used for cutting operations due to the diversion of industrial oxygen for the treatment of COVID patients.


In Mumbai, rebar prices remained unchanged, however, a few mills offered discounts at base Rs48,100/mt ex-works. Weekend lockdown in Mumbai is likely to impact rebar sales, thereby lowering demand for imported scrap. 


Ingot prices in Mandi Govindgarh, Friday, lost steam and drop to Rs42,500-42,600/mt ex-works, down Rs500/mt from Thursday. 


In China, mills expect steel prices to trend up on sustained demand. The production curbs in Tangshan, kept spot imported iron ore 62pc ferrous content prices rangebound at $172-173/mt cfr North China. Domestic billet prices on Friday dropped by CNY20/mt to CNY5,040/mt ($768/mt) ex-Tangshan, including 13pc VAT. Supportive steel prices pushed up scrap up by CNY30-50/mt. 


In Southeast Asia, offers zoomed up to $660-665/mt cfr on a sharp rise in Chinese billet prices. Indian mills also focused on exports, targeting billets at $615-625/mt fob India. 



The daily Davis Index for containerized shredded Friday settled at $451.64/mt cfr Indian subcontinent, up by $0.61/mt from a day prior; while that for containerized US-origin HMS 1&2 (80:20) was at $424.39/mt cfr Indian subcontinent, up by $0.13/mt from Thursday.



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