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

 Indian imported HMS scrap prices were on a downtrend weighed down by weakening domestic rebar prices. The market also turned silent this week for shredded bookings as finished steel sales have shown no signs of revival. Many medium and small-scale steelmakers have started lowering their output. Production in the country is estimated to be at 70pc capacity as mills want to avoid inventory pile-ups. 


The Davis Index for HMS 1&2 (80:20) of UAE-origin Wednesday dropped to $286/mt cfr Nhava Sheva, down by $5/mt from Tuesday. Deals for Dubai-origin HMS 1&2 (80:20) were at $285-287/mt cfr Nhava Sheva with some bids heard even at $280-285/mt cfr Nhava Sheva on Wednesday. Gujarat-based mill booked containers of #1 HMS from Dubai at $285-290/mt cfr Nhava Sheva on Wednesday against earlier offers of $290/mt cfr Nhava Sheva. 


Domestic rebar sales remain weak keeping prices on a downtrend. Rebar prices in the domestic market lost Rs400-500/mt ex-works Gujarat and Maharashtra. A few buyers diverted their finances to clear utility bills over purchasing scrap.   


The index for US-origin HMS 1&2 (80:20) settled at $288.57/mt cfr Nhava Sheva, down by $1.64/mt from Tuesday. Indian mills placed bids for the UK and US-origin HMS 1&2 (80:20) at $285/mt cfr Nhava Sheva against firm expectations from suppliers in the range $290-295/mt cfr Nhava Sheva. Offers for HMS1&2 (80:20) from Europe, South America, and West Africa were flat at $280/mt cfr Nhava Sheva. Turning scrap was offered at $265-270/mt cfr Chennai and bids were at $260/mt cfr Mundra on Wednesday.


The daily Davis Index for containerized shredded settled at $308.63/mt cfr Nhava Sheva, Wednesday, up by $0.88/mt. Bids for imported ferrous scrap were at $300-305/mt cfr Nhava Sheva, but no supplier was ready to accept these levels. Due to rising prices in Pakistan, only a few suppliers were in the Indian market and offered shredded at $310-315/mt cfr Nhava Sheva. No major trades were reported as buyers stayed away from shredded. 

Support from export markets, especially Chinese HRC and billet importers has also slackened. Faced with a lack of sales avenues, mills are distressed by cash flow crunch, rising electricity tariffs, shortage of oxygen cylinders. But with the domestic ferrous scrap availability increasing, they could get some respite, especially since it could have a bearing on input costs. 


Uncertainty in global markets, mainly due to China slowing trading ahead of the Golden Week holidays and the second wave of COVID-19 in the UK and other European countries, could dampen sentiment. As a result, imported scrap prices could also fall in the coming days. 


In Turkey, the disparity between bids and suppliers’ expectations extended further and US-origin HMS 1&2 (80:20) bulk prices remained largely unchanged at $295-296/mt cfr Turkey. But some market participants believe Turkish mills could cave in and book bulk cargoes for October and November shipments. 


In the bulk market, offers for HMS 1&2 (80:20) were flat in the range of $315-320/mt cfr Kandla. The gap between global prices and offers in the Indian market has narrowed by $5/mt. Still, buyers were unwilling to raise bids beyond $300/mt cfr Kandla. 


In the billet export market, activity was slow despite prices declining. Weak domestic sentiments held billet importers in SE Asia in a wait-and-watch mode. Pessimism ruled the export market ahead of the Golden Week Holidays which could keep eastern and Southeast Asian markets silent. Iranian mills also lowered billet export offers to $405-410/mt fob levels, down by $10/mt a week earlier. 



The Davis Index for containerized shredded, Wednesday, settled at $305.66/mt cfr Indian subcontinent, up by $0.55/mt from Tuesday. The daily Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $285.04/mt cfr Indian subcontinent, down by $0.75/mt. Low bids in India and Bangladesh pulled the index down despite prices staying firm in Pakistan. 



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