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

Weak export markets for Indian mills pulled down scrap bids by $7-10/mt from the prior week despite short supply. Most mills preferred domestic scrap to control costs giving a push to domestic scrap prices this week. Imported scrap prices remained under pressure as mills struggled with slow end-user demand. The depreciation of the Indian Rupee also weakened buying sentiments this week.


The daily Davis Index for containerized shredded on Friday was at $317.86/mt cfr Nhava Sheva, down $0.81/mt from a day prior while the prices dropped by $7/mt from prior Friday. Trades for UK origin shredded reported at $317-318/mt cfr Nhava Sheva, while a few bids on Friday were at $315/mt cfr Mundra. 


In the bulk market, no trade for US-origin HMS 1&2 (80:20) materialised as buyers were not in a position to bid above $300-305/mt cfr Kandla against the firm offers of $320-325/mt cfr Kandla on Friday. The gap between offers and bids widened further. Shortage of oxygen forced many recycling yards and steelmakers to suspend operations, which also brought down buying interest.


The weekly Davis Index for UK/Europe-origin HMS 1&2 (80:20) settled at $294/mt cfr Nhava Sheva, down by $6/mt from the prior week. Offers for UK-origin HMS 1&2 (80:20) and shredded scrap were heard at $300/mt cfr Nhava Sheva on Friday after a few yards found easing supply on higher collection rates.  


The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled at $298/mt cfr Nhava Sheva Friday, down by $8/mt from Thursday. Offers for Dubai-origin HMS 1&2 (80:20) were at $300/mt cfr Nhava Sheva as suppliers refused to accept lower bids of $290/mt cfr Nhava Sheva on Friday. #1 HMS scrap from Dubai yard booked at $305/mt cfr Nhava Sheva.


The index for US-origin HMS 1&2 (80:20) Friday settled at $296.25/mt cfr Nhava Sheva, down $11.25/mt from prior Friday. Most US supplier yards held offers high but steelmakers were unwilling to pay high. US suppliers preferred Taiwan and also domestic US markets where bids are higher than South Asia. 


The index for South African HMS 1&2 (80:20) settled at $295/mt cfr Nhava Sheva, down by $7.5/mt from the prior week. South African sellers continued to offer HMS at $300/mt cfr Nhava Sheva for 25-26mt loading. 


In Goa, steel mills resumed trades for imported West African scrap comprising higher ferrous content to blend with sponge iron. Bids from mills were around $280-285/mt cfr pulling the index down $5/mt to $288/mt cfr Goa. A few containers of TEU of West Africa-origin HMS 1&2 (80:20) traded at $285/mt cfr Chennai this week. 


Trades for HMS 1&2 (80:20) from Australia were reported at $295-300/mt cfr Chennai depending on quality. Most Brazilian suppliers were targeting high prices from Indian buyers amid high realisations in the domestic markets. 


The weekly indexes for higher grade scrap like busheling and P&S traded in very limited volumes. Indexes were at $333/mt cfr and $320/mt cfr Nhava Sheva, down $7/mt and $6/mt, respectively, from the prior week. Buyers would show interest in the premium grades once domestic market stays bullish, said a trader.


Turning scrap buying enquiries increased this week supporting prices despite a drop in HMS prices. The weekly index for Turning scrap was at $280/mt cfr Nhava Sheva. Productions ramp up by secondary mills have increased enquiries for Turning scrap. 



The Davis Index for containerized shredded, Friday, settled at $310.24/mt cfr India subcontinent, down $0.97/mt from Thursday. The daily Davis Index for containerized US-origin HMS 1&2 (80:20) settled at 288.92/mt cfr India subcontinental, down $7.9/mt from Thursday. Freights from the US east coast remained stable for Bangladesh and India while marginally moved up for Pakistan on limited availability, as per Davis analysis. 



The daily index for US-origin containerized HMS 1&2 (80:20) fell by $6/mt to $278/mt cfr Taiwan on Friday. As per steel mills, a price correction is on the cards due to limited buying and sluggish demand for finished steel. Bids for the same grade reduced on Friday to $275-278/mt amid expectation of a further reduction in the next week.

Japanese export offers have reduced by $10/mt Friday and are expected to fall further. Traders state that a $2.5/mt cfr fall in the Turkish Index from Sep 10, indicates a global correction in the next few days.

Steel mills in Taiwan await a recovery in steel demand from the infrastructural sector, which is being delayed due to the pandemic. New government-funded infra projects are expected to start in October and November.





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