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

Indian ferrous scrap prices dropped sharply for both, imported and domestic material, amid easing supply and strong resistance to high offers from buyers. The extended stand-off pressured some traders to sell material at prices lower than current market rates.  


Traders and indenters have stopped accepting offers from distant origins amid price volatility. Dubai-origin HMS, delivered within 10 days, is preferred. Many might wait for the Chinese market to offer clear direction on steel prices that in turn affect global ferrous scrap prices. Historically, steel prices drop ahead of the Chinese New Year holidays in February and rebound later. This year again, mills anticipate HRC demand globally would remain strong giving a boost to Chinese prices.  


The Davis Index for containerized shredded, Wednesday, settled at $438.75/mt cfr Nhava Sheva, down by $20/mt from Tuesday. Mills kept their bids $15-25/mt lower than offers, pulling the index down sharply in absence of trades. Indian buyers opted for domestic scrap which has lost over Rs1,000-2,000/mt in the last two days across the country. US-based suppliers offered shredded at $450-455/mt cfr India, but buyers remained silent amid non-viability.  


Dubai-based yards accepted lower prices in order to liquidate piling up of ferrous scrap. If global steel prices tumble on ramping-up productions in the coming days, no buyer would accept higher prices for ferrous scrap. This led suppliers to lose patience and drop offers sharply.  


The Davis Index for UAE-origin HMS 1&2 (80:20), Wednesday, settled at $380/cfr Nhava Sheva down by $25/mt from Tuesday. Some suppliers offered #1 HMS at $375-385/mt cfr Nhava Sheva on Wednesday, but buyers were not willing to pay even $370/mt cfr Nhava Sheva. Mills are interested in HMS only around $350-360/mt cfr Nhava Sheva, but yards refused those levels.  

The UAE origin HMS scrap has dropped from the asking rates of $440-450/mt cfr Nhava Sheva to $370-380/mt cfr Nhava Sheva, a slide of $80/mt in a week’s time, causing some market participants to panic. A few trades of West African origin HMS 1&2 (80:20) mixed CI-GI and Turning scrap were reported at $355-365/mt cfr Nhava Sheva.  


Sharp drop in ferrous scrap weighed on cast iron rotor and drums offers too. The weekly Davis Index for cast iron, rotors, and drums on Wednesday, tumbled by $53/mt to $406/mt cfr Nhava Sheva. Few offers heard at $400-410/mt cfr Nhava Sheva, but buyers showed little interest at these levels.


In China, demand for steel remained limited ahead of the Chinese New Year holidays starting from Feb 11. Lockdowns in the steelmaking province of Hebei has led to piled-up inventories. Spot iron ore prices dropped to $168/mt cfr China for Fe content 62pc, down by $5/mt. On Wednesday, Q235 150mm square billets prices in China remained stable at CNY3,810/mt ($588/mt) ex-works Tangshan, including 13pc VAT.  



The daily Davis Index for containerized shredded, Wednesday, settled at $434.95/mt cfr India subcontinent, down by $17.25/mt. The daily index for containerized US-origin HMS 1&2 (80:20) settled at $399.07/mt cfr India subcontinent, down by $19.50/mt.  

Though shipping lines are still struggling with container shortage, international freight rates on the New York-South Asian route declined.





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