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

Indian mills resisted firm offers of imported ferrous scrap and reduced their bids further. A decline in domestic finished steel sales, arrival of monsoon hitting logistics, and announcement of power cuts in the northern region dampened buying sentiment. A disparity of over $40-45/mt between asking prices and bids resulted in a quiet market. 


Secondary mills in Maharashtra, Punjab, and Gujarat were unable to sustain operations and announced production cuts. Mills faced margins squeeze as sales in the domestic and export markets are at prices below their expectations. Fears over a third COVID-19 wave have also added to the bearish sentiment in India. 


The daily Davis Index for containerized shredded, Tuesday, down by $0.5/mt to $529.5/mt cfr Nhava Sheva. Except for major alloy makers, most secondary furnaces in India were unwilling to pay over $450/mt cfr Nhava Sheva for any grade of imported ferrous scrap. 


Deals for shredded, busheling, and P&S were scarce as most buyers preferred to book HMS.  

The Davis Index for US-origin HMS 1&2 (80:20) on Tuesday was at $486.25/mt cfr Nhava Sheva, down $3.75/mt on low bids. There is a gap of over $40/mt between offers and bids. Sellers from Australia, UK, and Latin America were also unwilling to supply at price levels targeted by mills. 

The daily index for UAE-origin HMS 1&2 (80:20) dropped by $8/mt to $460/mt cfr Nhava Sheva, also on low bids. Many Dubai sellers lowered offers by $5-10/mt to $460-465/mt cfr Nhava Sheva despite strong global cues. Bids declined below $435-440/mt cfr Nhava Sheva.  

In Mumbai, domestic HMS 1&2 (80:20) offers were at Rs31,800/mt ($427/mt) del mill, around $25-30/mt lower than the equivalent price for imported scrap.


In Alang, melting scrap prices on Tuesday gained Rs200/mt to Rs33,800/mt ex-yards. In Mumbai, rebar prices are trending flat since June 24 at Rs45,800/mt ex-works. In Mandi Gobindgarh, around 50pc power cuts during July 8-18, likely to push prices marginally up and the index for ingot rose by Rs400/mt from Monday to Rs43,200/mt ex-works. 


On Tuesday, Chinese steel futures continued to strengthen as Tangshan mills resumed productions at 70pc capacity. The capacity utilization rate is likely to remain stable for the rest of the year in the Hebei province. Trades for rebar and HRC in the domestic markets resumed, and prices could rise for the steel products. Domestic billet prices rose by CNY40/mt from a day ago to $4,930/mt ex- Tangshan inclusive of VAT. Iron ore prices for ferrous content 62pc reached $222.36/mt cfr North China on Tuesday. Chinese HRC export offers recovered by $10/mt. 


Indian furnaces offered billets at $590-595/mt fob India and kept buying interest for ferrous scrap below $450/mt cfr to maintain the spread. With most of the Southeast Asian countries under lockdown, demand for billet is expected to stay bearish. 



The daily Davis Index for containerized shredded, Tuesday, settled at $535.18/mt cfr Indian subcontinent, down by $0.39/mt; while that for containerized US-origin HMS 1&2 (80:20) settled at $497.38/mt cfr Indian subcontinent, down by $1.59/mt. 



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