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

Indian mills opted for lowered price scrap like Turning and HMS than high and premium scrap grades amid bullish prices. With tightening domestic scrap availability, some steel mills are expected to be in the market for imported scrap trades this week. On Monday, inquiries were slower as few buyers decided to stay back amid a marginal drop of Rs200-400/mt in domestic semi-finished prices in the northern region.   


Secondary steelmakers in Gujarat, Punjab, and Jalna operated at lower capacities to cut their scrap requirements, while demand from Mumbai-based alloy and rebar makers is gradually rising as their inventories have started depleting. Trades in Southern India are gradually on track now. Major traders were optimistic about a recovery in imported scrap trades as domestic demand continues to outpace supply and many mills have no other option than to secure materials at higher prices.  


The Davis Index for containerized shredded on Monday settled at $439.29/mt cfr Nhava Sheva, up by $5.54/mt from Friday. A few deals in small volume heard at $435/mt cfr Nhava Sheva and $440-445/mt cfr Mundra. Most mills and suppliers have turned inactive. Offers for shredded from the US and Europe/UK on Friday heard above $435-445/mt cfr Nhava Sheva.


Offers for HMS scrap from Dubai and Kuwait were very limited amid strong domestic demand and suppliers hold trades to get more in the rising market. Traders anticipate demand to rise further as leading scrap exporter countries shut for winter break. Domestic demand for rebar is strong in Dubai, and most traders chose to cater to the domestic scrap consumption.  

The Davis Index for UAE-origin HMS 1&2 (80:20) rose by $7/mt cfr Nhava Sheva to $420/mt cfr Nhava Sheva. Dubai suppliers offered #1 HMS at $420-430/mt cfr Nhava Sheva, but buyers targeted around $410/mt cfr Nhava Sheva. 


In the Southern region, trades of HMS 1&2 (80:20) from Australia and the UK reported at $420-425/mt cfr Chennai and for European Turning at $375-385/mt cfr Chennai from late last week.


The daily Davis Index for US-origin HMS 1&2 (80:20) settled at $420.68/mt cfr Nhava Sheva, up by $8.68/mt from Friday. Indications of a stronger domestic market in January encouraged US yards to hold new offers. Buyers too have turned silent and most have postponed their restocking amid multi-year high offers. Containerised offers for the grade heard at $425-435/mt cfr Nhava Sheva against bids of $415-420/mt cfr. Suppliers from South and West Africa stayed away from the market due to permit issues and low collection rates.  


Strength in the Chinese futures market drove Chinese domestic and Southeast Asian billet prices. On Monday, Chinese rebar and billet futures rose sharply amid a bullish outlook for Q1 2021. Indian billet exporters were largely away. A Gujarat based steelmaker and bulk ferrous scrap buyer announced the shutdown of steel and power plant for maintenance activities and likely to restart dispatches of rebar and billets from December 31.   



The Davis Index for containerized shredded, Monday, settled at $438.1/mt cfr India subcontinent, up by $4.86/mt from Friday. The Davis Index for containerized US-origin HMS 1&2 (80:20) rose to $420.59/mt cfr India subcontinent, up by $8.36/mt from Friday, offers from US suppliers surged sharply driven by a jump in demand from East and Southeast Asian buyers. International containerised freight indexes maintained with Davis Index rose by around $1/mt on New York to India and Bangladesh route while remained flat for Pakistan.  



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