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

Despite soft global cues from Turkey and China, Indian imported ferrous scrap offers remained ‘stable to up’ on steady domestic demand. Also, the appetite for imported scrap in India is expected to stay strong in the coming weeks. Sentiments are positive with expectations of firm steel prices for September deliveries.


The daily Davis Index for containerized shredded, Thursday, inched down by $0.5/mt at $532/mt cfr Nhava Sheva. Indian buyers were reluctant to buy any grades priced above $500/mt cfr Nhava Sheva and focused on HMS trades. Most traders anticipate revival in demand on limited ferrous scrap inventories with steel producers. 


Amid steady demand for the HMS scrap available on prompt arrivals, trades for UAE-origin HMS were active in India. Also, in absence of buying from Pakistan and Bangladesh, UAE sellers accepted bids from India. 


The daily Davis Index for UAE-origin HMS 1&2 (80:20) was stable at $480/mt cfr Nhava Sheva on Thursday. UAE-origin #1 HMS, Thursday, traded at around $488-490/mt cfr Nhava Sheva on tight availability and stable domestic rebar demand in Mumbai.


In Mumbai, healthy demand for rebar has kept prices boosted. Domestic HMS 1&2 (80:20) was firm at Rs36,000/mt ($484/mt) delivered Mumbai. The gap between domestic and imported scrap has narrowed pushing importers to turn active and secure the supply. Ferrous scrap inventories are low and most market participants expect active buying from India as the monsoon starts to retreat. 


For billet exports bids remained less attractive. Also Chinese and Southeast Asian importers were away from the market. 


Domestic melting scrap prices unchanged in Alang. Yards are offloading stocks piled during more than a fortnight-long transporters’ strike. Melting scrap traded firm at Rs36,400/mt ex-Alang from a day prior. In Mumbai, the asking prices for rebar were unchanged at Rs50,700/mt ex-works. 


In Mandi Gobindgarh, ingots traded at Rs45,900/mt ex-works marginally down by Rs100/mt as rebar demand remained slow in North India. In Chennai, mills preferred domestic scrap and trades for imported scrap were largely suspended. 


Nervousness extended among Indian steel makers following Chinese cues, especially on plummeting spot and future iron ore prices and weak billet import demand. But the impact of Chinese prices seems limited due to fewer steel exports since the cancellation of rebates. Earlier Chinese exports could hurt global steel prices.


In China, demand concerns played out amid steel production cuts, iron ore prices have corrected in the last couple of days. Port operations at the Ningbo port are expected to resume. Most participants are hoping for a revival in Chinese demand and prices in September. 


On Thursday, the daily domestic billet price in China, tumbled by CNY70/mt to CNY4,910/mt ($756/mt) ex-Tangshan inclusive of VAT. Bids for imported billet thus dropped below $660-670/mt cfr China, down more than $10/mt from Thursday.


On Thursday, international iron ore Fe 62pc prices declined over $10/mt. Spot rates also could drop further. Finished steel futures recorded a drop of 4-5pc on Thursday. 



The daily Davis Index for containerized shredded on Tuesday, settled at $537.3/mt cfr Indian subcontinent, down by $0.2/mt; while that for containerized US-origin HMS 1&2 (80:20) settled at $492.15/mt cfr Indian subcontinent, up by $0.4/mt.

($1=Rs74.38; CNY6.49)

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