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

Imported ferrous scrap offers to India continued to trend up on Thursday but bids lagged by $15-20/mt from current offers. Ferrous scrap demand is likely to improve next week amid successive hikes in domestic steel prices. Some mills resisted high imported scrap prices, which extended the stand-off between suppliers and buyers, this week. In December, imported scrap offers rose $90-100/mt in India but trades fell as mills avoided buying at record high prices. 


The daily Davis Index for containerized shredded, Thursday, settled at $465/mt cfr Nhava Sheva up by $1.25/mt from Wednesday. The index rose by 8.12/mt from a week ago while it gained $95/mt in December. Most suppliers went silent for the year-ending holidays while a few offers for shredded from the US and Europe/UK were $465-475/mt cfr Nhava Sheva, citing a possibility of higher prices in January. 


Container shortage in Asia is a major concern for shipping lines leading to successive hikes of freight rates and increasing landing costs for importers. Bulk cargo importers stayed away from the market despite limited stocks citing unviable prices.


Domestic demand for rebar is strong in Dubai, and most traders chose to cater to the domestic scrap market. The Davis Index for UAE-origin HMS 1&2 (80:20) Thursday rose by $3/mt cfr Nhava Sheva to $443/mt cfr Nhava Sheva. Dubai-based suppliers offered #1 HMS at $435-445/mt cfr Nhava Sheva, but buyers bid $425-430/mt cfr Nhava Sheva. 


HMS scrap prices showed mixed trends with some traders rushing to sell materials before prices lose steam. Secondary steel producers in India continue to struggle with weak end-user demand while primary steel mills have a positive outlook for the New Year.


The daily Davis Index for US-origin HMS 1&2 (80:20) settled at $445/mt cfr Nhava Sheva, up by $1.79/mt. The index inched up by $5/mt from Dec 24, following global cues. Buyers have turned silent and postponed restocking amid firm offers. Suppliers were not ready for trades at bids of $425-435/mt cfr. In absence of trade, the indexes for #1 busheling, Turning and P&S scrap showed marginal movement of $2-3/mt this week and settled at $471/mt, $390/mt and $445/mt cfr Nhava Sheva, respectively.


In the domestic market, billet and domestic scrap showed an uptick in rising demand. HMS 1&2 (80:20) prices were at Rs30,000/mt ($411/mt) delivered Mumbai mill. Strengthening Indian currency Rupees against US Dollar to 73 on Thursday could support import sentiments in the coming week.  


Billet export offers strengthen

Imported scrap demand could find support from the strengthening international billet market. Iranian billet prices surged as high as $555/mt fob Iran pushing Indian mills to target above $585-590/mt fob India. On Thursday, Q235 150mm square billets prices in China rebound and gained CNY50/mt to CNY3,780/mt ex-works Tangshan including the 13pc VAT from Wednesday. Russian supplier offered billets at $620/mt cfr Philippines against bids of $600/mt cfr Philippines. 



Major shipping lines are expected to pause loading activities during the extended New Year weekend. Freight rates remain firm. The Davis Index for containerized shredded, Thursday, settled at $465.04/mt cfr India subcontinent, up by $8.06/mt from a week ago. The Davis Index for containerized US-origin HMS 1&2 (80:20) rose to $446.42/mt cfr India subcontinent up by $6.5/mt from Dec 24. 



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