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

Indian imported ferrous scrap buyers were willing to accept present offer levels as domestic fundamentals have started improving. The outlook for steel demand is positive, keeping steel and scrap prices firm. But the pace of recovery is slow and sellers could continue to offer more material in other markets like Pakistan and Turkey, where buyers are willing to pay higher prices.  


Indian mills observed the Chinese price movement and sought clarity on the potential steel export tax of around 10-25pc announced by the world’s largest steel producer. Should the tax come into existence, Indian exporters could aggressively negotiate in the global markets and fill in the supply void left by two major steel suppliers- China and Russia. Global steel prices could thus stay firm, supporting imported ferrous scrap deals.


The daily Davis Index for containerized shredded on Tuesday settled unchanged at $537.5/mt cfr Nhava Sheva. Offers for shredded from the UK/EU on Tuesday were at $540-545/mt cfr Nhava Sheva. Tight scrap supply in the domestic markets could drive imports in the coming days.


Most traders resisted the bids from secondary producers for shredded at $525-530/mt cfr Nhava Sheva. A deal for around 500mt of shredded was heard at these levels. But traders believe it to be a distress sale since most offers remain above $540-545/mt cfr. 

Availability for higher grades, including shredded, remains tight which has kept the gap between HMS and prime grades broad. A shortage of containers makes it difficult for most sellers to accept Indian bids which are lagging by broad margins. 


The daily Davis Index for UAE-origin HMS 1&2 (80:20) rose by $2/mt to $475/mt cfr Nhava Sheva. Offers from UAE sellers remained firm, and buyers raised bids to $470-475/mt cfr Nhava Sheva following sustained recovery in steel prices and demand in India.

In Alang’s shipbreaking market, there were no trades amid transporters’ strikes. Transporters are demanding an increase in freight rates by 30pc for inter-state and 20pc intra-state trips. In Mumbai, asking rates for rebar rose by Rs400/mt on Tuesday to push the index at Rs48,500/mt ex-works. In Mandi Gobindgarh, ingot traded down by Rs300/mt at Rs45,200-46,300/mt ex-works.


International iron ore Fe 62pc in the spot market was at $202.95/mt cfr North China. On Tuesday, steel futures declined. Iron ore prices could also drop below $200/mt cfr China soon. 

On Tuesday, domestic billet prices in China Tuesday rose by CNY20/mt to CNY5,260/mt ex-Tangshan inclusive of VAT. HRC futures dropped below CNY5,900/mt. Chinese demand for imported billets dropped this week. On improving domestic fundamentals, Indian mills shifted focus from exports to domestic sales. Offers for billets from India were still above $625-630/mt fob. 


The daily Davis Index for containerized shredded settled at $542.51/mt cfr Indian subcontinent, unchanged, while the daily Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $498.95/mt cfr Indian subcontinent, up by $2.25/mt. 


($1=Rs74.42; CNY6.51)

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