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

Indian mills were largely away from the imported ferrous scrap market amid ease availability of competitively priced domestic scrap. Imported scrap offers from the UAE rose despite a decline in Turkish prices. Indian steel mills, both induction-based and blast furnace makers, failed to secure billet export orders, thereby slowing scrap restocking. Mills are low in scrap inventories and with the decline in scrap offers, restocking is expected to resume in the next few days, said traders. 


The Davis Index for containerized shredded, Thursday, settled at $421.25/mt cfr Nhava Sheva, down by $1.25/mt from Wednesday. Most buyers stayed away from shredded bookings awaiting a further drop in the coming days. Secondary steelmakers are unwilling to bid above $400/mt cfr Nhava Sheva for shredded and $350-360/mt cfr for the HMS grade.


Globally, ferrous scrap prices have started returning to pre-pandemic levels after charting a 12-year high of $485/mt cfr Turkey in the first half of January amid short supply and COVID-19 disruptions. Market participants expect prices to fall below $400/mt in the next few days. 


The Davis Index for UAE-origin HMS 1&2 (80:20), Thursday, fell to $352/cfr Nhava Sheva up by $6/mt from Wednesday. Dubai-origin HMS #1 offered at $375-385/mt cfr Nhava Sheva on Wednesday.


The daily Davis Index for US-origin HMS 1&2 (80:20), Thursday, dropped to $366.25/mt cfr Nhava Sheva, down $3.25/mt. #1 HMS offers heard at $385-390/mt cfr Nhava Sheva on Wednesday. Mixed HMS from the US offered at $355-360/mt cfr Nhava Sheva but could not compete against domestic equivalent priced at Rs26,000-26,500/mt delivered Mumbai consumer. 


Falling scrap prices pressure billet 

Indian mills sought to export billets at $540-550/mt fob India amid a decline in the domestic prices. However, a $20-25/mt drop in Iranian billet prices at $535-540/mt fob Iran hurt sentiments. A leading blast furnace maker in the south cancelled export tender as it failed to attract desired bids.   


In China, amid anticipation of strong demand in 2021, mills are keen to secure raw materials. Mills are expected to turn active for exports post-Lunar New Year holidays. On Thursday, Q235 150mm square billets prices in China remained stable at CNY3,860/mt ex-works Tangshan including 13pc VAT. On the other hand, there was strong downward pressure on the spot iron ore prices amid rising inventories and lull in demand. Spot prices for Fe 62pc content iron ore, Thursday, dropped by 4.8pc or $9.5/mt to $157/mt cfr China from Wednesday. 



The daily Davis Index for containerized shredded, Thursday, settled at $413.45/mt cfr India subcontinent, down by $3.65/mt. The daily index for containerized US-origin HMS 1&2 (80:20) settled at $371.57/mt cfr India subcontinent, down by $2.42/mt. Improved container availability held freight rates stable this week, while bids for HMS scrap in the subcontinent were under pressure amid weak domestic fundamentals. 



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