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

Indian ferrous scrap importers continued to stay silent waiting for a decline in offers. The extended standoff pressured some traders to sell material at lower than current market prices. Only Dubai-origin HMS trades are heard in the market as longer delivery period of 25-60 days weighed against trades from other origins. Traders and indenters have stopped accepting offers from distant origins amid price volatility. Dubai-origin HMS is delivered within 10 days and is a preferred option in current market conditions. If steel prices fail to sustain in the next two months, buying scrap at high offers could significantly lower steelmaker’s margins, said a trader. 


The Davis Index for containerized shredded, Monday, settled at $468.75/mt cfr Nhava Sheva, down by $10.54/mt from Friday. Buyers were unwilling to book high grades, including shredded. A couple of firm offers for shredded from US-based suppliers heard at $465-470/mt cfr India, but buyers remained silent.


The landed cost for imported HMS 1&2 (80:20) at $415-420/mt cfr Nhava Sheva computes to around Rs31,500-32,500/mt delivered Mumbai mill, including import duties, freight, and port handling charges. Meanwhile, domestic HMS 1&2 (80:20) on Monday reversed trend to settle at Rs28,750/mt ($392/mt) delivered Mumbai mill, up Rs1,000/mt. Given the delays in sea-borne shipment, mills preferred domestic HMS over imported. 


Ending a stand-off, Dubai-based sellers accepted some bids from Indian mills. The Davis Index for UAE-origin HMS 1&2 (80:20), Monday, settled at $416/cfr Nhava Sheva down by $11/mt from Friday. Some suppliers offered #1 HMS at $430-435/mt cfr Nhava Sheva, but bids were below $410-415/mt cfr Nhava Sheva. Mills are interested in HMS scrap at $400-410/mt cfr Nhava Sheva, but yards refused to those levels. 


A few distressed sales for #1 HMS from UAE heard at $415-420/mt cfr Nhava Sheva and mixed HMS at $405-410/mt cfr Nhava Sheva. Bucking the global trend, Indian buyers’ bids around $400/mt cfr Nhava Sheva on Monday.


In China, steel prices have dropped and are expected to remain under pressure in mid-February on account of Chinese New Year holidays from Feb 12-19. Lockdowns in the steelmaking province of Hebei and harsh winter has lead to piled-up inventories. On Monday, Q235 150mm square billets prices in China fell CNY10/mt ($1.54/mt) to CNY3,810/mt ($586/mt) ex-works Tangshan including 13pc VAT. 


Indian mills offered billets at $575-580/mt fob India, while a Philippine-based mill is heard to have bought 40,000mt billets from a Chinese supplier at $590/mt cfr Manila. Export prices for billets expected above $600/mt cfr SE Asian, indicated market participants. 



The Davis Index for containerized shredded, Monday, settled at $461.65/mt cfr India subcontinent, down by $14.36/mt from Friday. The index for containerized US-origin HMS 1&2 (80:20) settled at $429.61/mt cfr India subcontinent, down by $8.22/mt. Many shipping lines are still struggling with the shortage of containers leading to a rise in international freight rates. On Friday, Davis Index of container freight on the New York to India route lowered marginally amid easing supplies. The shortage issue could resolve with the Chinese New Year holidays slowing import-exports in China.


($1=Rs73.23, CNY6.49)

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