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

Indian steel mills resisted the sudden rise in imported scrap offers through the week but an anticipation recovery in auto demand in September kept buyers optimistic. Steelmakers have either raised prices of finished steel or are planned to hike prices in September. This has led to protests and demand for regulation on steel prices by various industrial associations. A sharp hike in steel prices has impacted small and medium scale manufacturers in India.


After a pause, SE Asian and China-based billet importers have raised bids and paid upto $445-450/mt cfr Philippines for Indian billets. Demand remains subdued and importers are likely to turn active in mid-September when they will return to refill their raw material inventories.


In the bulk market, no trade for US-origin HMS 1&2 (80:20) were reported. Offers from the US West Coast were at $320-325/mt cfr Kandla but bids were not above $315/mt cfr Kandla on weak domestic demand. 


The index for containerized shredded Friday settled at $321/mt cfr Nhava Sheva on Friday, up $3/mt from Thursday and up by $8/mt from the prior week. A few trades for US-origin containerized shredded concluded at $318-322/mt cfr Mundra this week, offers on Friday were at $325-330/mt cfr Nhava Sheva, despite bids of $320/mt cfr Nhava Sheva from major mills.  


Indian alloy makers accepted $320-322/mt cfr Nhava Sheva levels for shredded amid tight supply. These mills, however, reduced their booking volumes to cover immediate requirements. Traders bought more containers at $320-325/mt cfr Nhava Sheva in anticipation of strong demand in mid-September. Leading primary steelmaker RINL raised finished steel prices by Rs500-800/mt on Friday, this triggered some buyers to procure at higher offers. 


The Davis Index for UAE-origin containerized HMS 1&2 (80:20) settled at $304.55/mt cfr Nhava Sheva, up by around $7/mt from the prior week. UAE suppliers increased trades to Indian buyers as Pakistani importers slowed purchases this week. Shorter delivery period weighed in favour of UAE suppliers over scrap from other origins. 


The index for US-origin HMS 1&2 (80:20) settled at $305/mt cfr Nhava Sheva, up by $2/mt from Thursday and $8/mt from the prior week. On Friday, offers for the grade reported at $310/mt cfr Nhava Sheva. 


The weekly Davis Index for UK/Europe-origin HMS 1&2 (80:20) settled at $290/mt cfr Nhava Sheva, up by $5/mt from the prior week. Offers for UK-origin HMS 1&2 (80:20) and sheared scrap were heard at $290-295/mt cfr Nhava Sheva. Market participants are uncertain if this hike will sustain as trade tensions between China and the US and China’s border issues with India continue to flare up. 


The index for South African HMS 1&2 (80:20) settled at $298/mt cfr Nhava Sheva, up by $5mt from the prior week. South African suppliers were active in the Indian market to benefit from the shortage of domestic scrap in India. The supply crunch is expected to ease in the next couple of weeks, believe market participants. #1 HMS was offered at $305-310/mt cfr Nhava Sheva following global cues but buyers showed little interest. 


The Indian rupee has gained against the US dollar to stay around 73 levels. Strengthening rupee will encourage scrap buyers to increase purchases volumes, said a trader.  


In Goa, steel mills resumed trades for imported west African scrap which they blend with Sponge iron. Sponge iron prices in India remained high following higher iron ore prices. Mills in Chennai bought West Africa-origin HMS 1&2 (80:20) at $285/mt cfr Chennai. Prices were up by $10/mt from the prior week. 


Trades for HMS 1&2 (80:20) from Australia were reported at $305/mt cfr Chennai depending on quality. 


The weekly indexes for higher grade scrap like busheling and P&S in containers were at $336/mt cfr and $320/mt cfr Nhava Sheva, up $8 and $5/mt from the prior week. Trades for higher grades scrap, albeit limited, recovered as Indian buyers returned to the market with fresh bookings. 


The weekly index for Turning scrap rose by another $3/mt to $281/mt cfr Nhava Sheva with trades reported at the index price. Brazilian traders sold Turning at $280/mt cfr to Chennai-based traders against the prior deals of $260-265/mt cfr Nhava Sheva.  



The Davis Index for containerized shredded, Friday, settled at $312.3/mt cfr India subcontinent, up from $309.9/mt from Thursday. The Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $297.7/mt Friday up from $289.8/mt cfr India subcontinent from a week earlier. 


East Asia – Taiwan

The daily index for US-origin containerized HMS 1&2 (80:20) settled flat at $270/mt cfr Taiwan on Friday. Trades for the grade were heard at $268-270/mt. Some offers were at $275-280/mt cfr.

Offers for South American HMS 1&2 (80:20) were at $265/mt cfr with no trades heard. Manufacturers believe domestic finished steel trades will rise in September after infrastructure projects gain momentum. Steel mills are yet to increase production due to sluggish finished steel demand. 


Political tensions with China are expected to impact demand, due to which steel mills are in a wait-and-watch mode. As per traders’ buyers want to analyse the current scenario and might reduce booking for the next week. Market participants expect a rise in global finished steel prices and a demand uptick in October as global trade recovers.


($1=Rs73.1; TWD29.32)

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