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

Indian importers are upbeat on rising domestic and international steel prices. Inquiries for ferrous scrap gained momentum as mills could target export markets in absence of Chinese supplies amid production limits. News on possible export rebate cut in China fuelled bullish sentiment among traders.  


Despite the resurgence of COVID-19, rebar demand in Mumbai, Chennai, and Ludhiana is expected to stay healthy for the next two months ahead of monsoon season encouraging importers to secure more scrap.  


Following high-priced deals for shredded in Pakistan, the Davis Index for containerized shredded jumped up $7.5/mt to $441.25/mt cfr Nhava Sheva from Wednesday. Mills found present offers for shredded less viable and preferred domestic scrap or imported HMS trades. On Thursday, offers for shredded were in the range of $440-450/mt cfr Nhava Sheva, hitting a three-week high.


In Turkey, most mills focused on steel sales on the depreciation of lira. Offers for HMS 1&2 (80:20) in bulk were heard stable at $425-430/mt cfr Turkey. Resumption of May bulk booking in Turkey could boost imported scrap prices in South Asia.


Trades for Dubai-origin HMS picked up on active demand. The daily Davis Index for UAE-origin HMS 1&2 (80:20), Thursday, settled at $413/cfr Nhava Sheva, up by $10/mt from Wednesday. Dubai-origin HMS #1 offered at $425-430/mt cfr Nhava Sheva, up over $10-15/mt this week. There is increasing competition to secure materials ahead of Ramadan resulting in a temporary shortage, believe traders. 


The daily index for US-origin HMS 1&2 (80:20) settled at $416.5/mt cfr Nhava Sheva, up $3/mt from Thursday. Offers for HMS 1&2 (80:20) from the UK and Australia were at $410-420/mt cfr Nhava Sheva on Thursday. While buyers’ target moved to $400-405/mt cfr on limited availability on hand. Driven by record high iron ore prices, sponge iron prices increased forcing furnace makers to opt for scrap over sponge.  


Offers for Busheling and Turning heard above $470-475/mt cfr and $385-390/mt cfr Nhava Sheva, with very limited buying interest.  

On Thursday, melting scrap offers in Alang dropped by Rs200-300/mt to around Rs31,800/mt ex-yard amid slow demand due to financial year-end. 


In Mandi Gobindgarh, active trading has resumed after a strike last week. Ingot prices recovered to Rs42,300-42,500/mt ex-works Mandi Gobindgarh on high imported scrap offers. In Mumbai, rebar prices remained unchanged at Rs47,800/mt ex-works.


In China, the possibility of robust steel demand in the second quarter pushed up steel futures. Spot imported iron ore 62pc ferrous content remained around $165/mt cfr North China. On Thursday, amid the continuing shortage of billets due to production cuts, domestic billet prices in Tangshan’s retail market remained at a 12-and-half year high of CNY4,800/mt ex-Tangshan including VAT, up CNY10/mt. Chinese imports are expected to pick up. But exports could drop as mills await clarity on tax rebates.  



On Thursday, following rising demand and increased container freight charges on the US-Asia route, effective April 1, the daily Davis Index for containerized shredded rose to $438.45/mt cfr Indian subcontinent, up $7.59/mt. The daily index for containerized US-origin HMS 1&2 (80:20) settled at $413.67/mt cfr Indian subcontinent, up by $3.28/mt from Wednesday.  


As per weekly containerized freight rates maintained by Davis Index, rates were at $41.8/mt, $52.8/mt, and $74.5/mt from New York to India, Pakistan, and Bangladesh, respectively. 



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