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

Imported ferrous scrap offers in India continued to trend up. Trades resumed, but buyers purchased limited volumes. The increased market confidence about bullishness sustaining in the global market and strengthening finished steel prices in the domestic market aided these trades. Many secondary steelmakers operated at lower levels to cut their scrap requirements. 

In the domestic market, steel associations decided to raise ingot, rebar, and Sponge iron prices by Rs2,000/mt in tandem, at the close of Dec 15. These prices could stay unchanged for the next seven days in Raipur central India. According to the announcement, rebar prices in India rose Rs2,000-2,500/mt on Wednesday. 


The weekly Davis Index for cast iron, rotors, and drums on Wednesday, settled at $428/mt cfr Nhava Sheva, up by $25/mt. Offers were scarce and only at price levels which are unviable for deals. Suppliers tried to make the most of the bullish market. Asking prices for cast rotors and drums were above $430-440/mt cfr Nhava Sheva with the possibility of a further uptrend following cues from the bulk market.


A shortage of containers and the resulting rise in freight rates could continue for at least a month due to a mismatch between imports and exports. Importers may also face customs clearance delays leading to additional tariffs in the coming days. In Turkey, a few trades for bulk HMS 1&2 (80:20) reported at prices equivalent to $430/mt cfr Turkey with offers rising further. The bullish Turkey market sent reverberations to the South Asian markets, where offer prices strengthened. 


The Davis Index for containerized shredded on Wednesday increased by $1.5/mt to settle at $427.33/mt cfr Nhava Sheva. Shredded buyers are trying to limit their purchases from the import market at present price levels. But should the supply tighten, mills would have no option but to accept the fresh offers. Shredded and busheling were offered at $435/mt and $455/mt cfr Mundra, respectively, on Wednesday.


The daily Davis Index for UAE-origin HMS 1&2 (80:20) on Wednesday settled at $404/mt cfr Nhava Sheva, up by $1/mt. Many trades were reported for material from Kuwait and Dubai amid strengthening rebar and domestic scrap prices in India. Offers for containerized #1 HMS without the cast and galvanized iron from Dubai were prices above $415-420/mt cfr Nhava Sheva on Wednesday, with buyers interested at $405-410/mt cfr Nhava Sheva. These levels could drive domestic scrap prices to rise further by Rs1,000/mt and  lead to a renewed interest for imported scrap, said a trader.


In North India, buyers stayed away from the market as the ongoing farmers’ protests have disrupted transportation. Some mills opted for domestic ferrous scrap. 

Many market participants believe that the possibility of a correction in iron ore prices impacting ferrous scrap market seems remote. Rather, some Indian buyers shed resistance and accepted firm offers this week, as amid limited supply with yards, traders remain bullish. Demand in Turkey also remains strong ahead of the winter break starting late December. Traders believe prices for shredded bulk cargoes have the room to increase by another $10-15/mt and lift asking prices in South Asia. Before the calendar year ends, shredded offers could reach $450/mt cfr Qasim and Nhava Sheva. 


The Davis Index for US-origin HMS 1&2 (80:20) settled at $404.64/mt cfr Nhava Sheva, up by $0.35/mt from Tuesday, with trades at the index price. Offers for containers of the grade then moved up to $415-420/mt cfr Nhava Sheva against bids of $400/mt cfr Nhava Sheva. 

Suppliers from South and West Africa stayed away from the market due to permit issues and low collection rates. A stronger billet export market could support scrap imports in India. The rise in input cost pushed asking prices for billets to above $550-560/mt cfr for buyers in China and Southeast Asia. Following the rising futures market in China, prices are expected to rise more in the coming days.



The Davis Index for containerized shredded, Wednesday, settled at $426.54/mt cfr India subcontinent, up by $0.94/mt from Tuesday. The Davis Index for containerized US-origin HMS 1&2 (80:20) rose to $405.83/mt cfr India subcontinent, up by $1.59/mt from Tuesday. Freight rates on the New York-South Asian route could move up amid acute container shortage and curtail trades. 



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