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

Weak export markets for Indian mills pulled down HMS scrap prices $5-10/mt in India from a week ago. Most mills preferred domestic scrap to control costs. More and more indications of a drop in global scrap prices turned buyers cautious towards the end of the week. High-grade scrap remains non-viable for many Indian buyers.    


The daily Davis Index for containerized shredded settled at $305.75/mt cfr Nhava Sheva, down by $2.88/mt from Thursday. Since last Friday, the index dropped $2.96/mt. Bids for shredded were at $303-305/mt cfr Nhava Sheva Thursday countering offers of $308-310/mt cfr Nhava Sheva. Prices dropped by a total of $20/mt in a fortnight in line with weak domestic scrap prices.  


Indian imported HMS scrap prices were on a downtrend weighed down by weakening domestic rebar prices. Many medium and small-scale steelmakers have started lowering their output. Few major steelmakers indicated for another round of hike in prices by Rs1,000-1,500/mt, however, it less likely to be accepted in the market.


The Davis Index for HMS 1&2 (80:20) of UAE-origin Thursday dropped to $284/mt cfr Nhava Sheva, down by $2/mt from Wednesday. Prices dropped $8/mt from the prior Friday. Deals for Dubai-origin HMS 1&2 (80:20) were at $282-285/mt cfr Nhava Sheva with some bids heard even at $280/mt cfr Nhava Sheva on Thursday. A few traders offered containers of #1 HMS from Dubai at $285/mt cfr Nhava Sheva against earlier offers of $290/mt cfr Nhava Sheva.  


In the bulk market, no trade for US-origin HMS 1&2 (80:20) materialized as buyers were not in a position to bid above $300/mt cfr Kandla against firm offers of $310-315/mt cfr Kandla on Thursday. Indian mills are struggling with low sales of rebar and subdued billet exports, which turned them silent in the scrap market.


The weekly Davis Index for UK/Europe-origin HMS 1&2 (80:20) settled at $285/mt cfr Nhava Sheva, down by $6/mt from the prior week, trades reported at index price. On Thursday, a trader sold 3,000mt UK origin HMS 1&2 (80:20) in containers at $285/mt cfr Nhava Sheva. Supplies at a few yards in UK have improved on higher collection rates.  


The index for US-origin HMS 1&2 (80:20) settled Thursday at $285.71/mt cfr Nhava Sheva, down by $7/mt from last Friday. Trades for the US-origin HMS 1&2 (80:20) were at $285-290/mt cfr Nhava Sheva. But most suppliers believe the downside is limited and ferrous scrap prices could receive support in October when demand recovers. The possibility of a second wave of COVID-19 in Europe and UK markets and elections in the US market in November adds to uncertainly in the market.


The index for South African HMS 1&2 (80:20) settled at $284/mt cfr Nhava Sheva, down by $6/mt from the prior week. South African sellers offered #1 HMS at $290/mt cfr Nhava Sheva for 25-26mt loading on Thursday.  

In Goa, domestic volatility kept steel mills away from trades. Bids from mills were around $270-275/mt cfr pulling the index for HMS 1&2 (80:20) down $7/mt to $278/mt cfr Goa. A few containers of TEU of West Africa-origin HMS 1&2 (80:20) traded at $275-278/mt cfr Mundra this week.  


Trades for HMS 1&2 (80:20) from Australia were reported at $290/mt cfr Chennai depending on quality. The weekly indexes for higher grade scrap like busheling and P&S traded in very limited volumes. Indexes were at $323/mt cfr and $311/mt cfr Nhava Sheva, down $3/mt and $4/mt, respectively, from the prior week. No major interest for higher grade scrap was present in the market, many find even shredded scrap non-viable, said a trader.

Turning scrap buying inquiries increased this week amid a drop in HMS prices. The weekly index for Turning scrap was at $268/mt cfr Nhava Sheva, down $2/mt from last week. A trader offered Turning at $265-270/mt cfr Chennai while a few bids for Turning scrap reported at $260/mt cfr Mundra.  



The Davis Index for containerized shredded, Thursday, settled at $299.76/mt cfr India subcontinent, down $5.82/mt from Wednesday, while down $4/mt from a week earlier. The daily Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $278.92/mt cfr India subcontinental, down $5.65/mt from Wednesday. Low bids in India and Bangladesh pulled the index down. Also containerized freight rates have dropped this week.  




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