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

Imported ferrous scrap offers in India trended up amid bullish global cues. The continuous price rise has kept buyers away from the market though, despite strong domestic fundamentals. Major shipping lines have decided to lower the number of free days at some destinations, particularly in Asia, effective Jan 1, 2021, to deal with the shortage of containers. This is expected to increase freight costs for Indian importers as customs clearance delays may lead to additional tariffs. Thus, importers have turned silent in India.  


In Turkey, the daily index for bulk HMS 1&2 (80:20) reached $399.6/mt cfr Turkey, setting a new record, following which offers in South Asia approached a six-year high.  


The Davis Index for containerized shredded on Friday settled at $411.88/mt cfr Nhava Sheva, up by $8.55/mt from Thursday and $29.02/mt from a week ago. There were very few deals as most mills have turned silent due to high prices. Offers for shredded from the US and Europe/UK on Friday were above $410-415/mt cfr Nhava Sheva. A few offers were reported even at $420/mt cfr Chennai.  

The Davis Index for UAE-origin HMS 1&2 (80:20) settled at $390/mt cfr Nhava Sheva, up by $22/mt from December 4. Offers for containerized #1 HMS without the cast and galvanized iron from Dubai were above $390-400/mt cfr Nhava Sheva on Friday. Domestic scrap remained a preferred choice for many buyers amid uncertainty in deliveries of imported material.  


The Davis Index for US-origin HMS 1&2 (80:20) was at $388.07/mt cfr Nhava Sheva on Friday, up by $23.57/mt from prior Friday. Offers for containers of the grade were heard at 390/mt cfr Nhava Sheva on Friday against buyers’ bids of $375-380/mt cfr Nhava Sheva. 


Offers for containerized Australian HMS 1&2 (80:20) were at $390/mt cfr Chennai, at prices up by $20/mt from December 4. A few trades for Australia and the UK-origin HMS 1&2 (80:20) were at $380-385/mt cfr Nhava Sheva. Suppliers from South Africa and West Africa stayed away from the market due to permit issues and restricted inflows.


The index for #1 busheling settled at $423/mt cfr Nhava Sheva, up by $29/mt from the prior week. The weekly index for Turning scrap was at $356/mt cfr Nhava Sheva, up by $23/mt, with offers of $360-365/mt cfr Nhava Sheva on Friday, but buyers showed a lot of resistance over the current offers. P&S scrap traded at $400-405/mt cfr Nhava Sheva in thin quantities, with the index for the grade rising by $21/mt from the prior Friday.


High imported scrap prices pushed billet export prices up, with some Indian mills targeting $520-530/mt fob India. Meanwhile, the Iranian billet was sold at $500-505/mt fob Iran, giving a push to the global billet market.  


International iron ore prices (Australian 62pc Fe content) reached a multi-year high at $160/mt cfr China on Friday amid indication of supply concerns in the upcoming days. Chinese HRC prices were at $620-630/mt fob depending on the grade, gaining almost $40/mt in a week. Chinese producers offered domestic billets at CNY3,680/mt ex-Tangshan, up by CNY100/mt from a week ago.


Mills opted for domestic ferrous scrap over economically unviable imported scrap. Domestic scrap is available in sufficient volumes amid recovery in production activities. Sponge iron is still being preferred for quicker availability. With the resumption of iron ore mining in Odisha, the persisting supply crunch for ore and Sponge iron is expected to ease soon. Thus, there was strong resistance high imported scrap prices in India, unlike Pakistan and Bangladesh where dependence on imported scrap is very high.  



The Davis Index for containerized shredded, Friday, settled at $410.74/mt cfr India subcontinent, up by $8.37/mt from Thursday. The Davis Index for containerized US-origin HMS 1&2 (80:20) was at $388.72/mt cfr India subcontinent, up by $7.14/mt from Thursday.




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