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

Some Pakistani mills have decided to step back from new bookings. Bids had started falling on Wednesday and extended the drop further on Thursday. Several suppliers and traders were offering material but buyers have turned silent. Few mills lowered bids citing a marginal downtrend in domestic billet and scrap prices. An increase in the number of offers in the market could tilt negotiations in the favour of mills in the coming days.  


Suppliers, on the other hand, kept offers firm citing container shortage and limited scrap generation due to COVID-19 restrictions. The drop in ferrous scrap prices could be temporary and prices may turn around next week with the revival of demand amid continued short supply, said a trader. 


The daily Davis Index for containerized shredded, Thursday, dropped by $9.53/mt to $495.19/mt cfr Port Qasim. Suppliers from the UK/EU and the US held offers in containers at just above $500/mt cfr Qasim, a few traders  and indenters were under pressure to reduce their positions before prices drop further. 


Late Wednesday, thin volumes of shredded from the UK and EU-origin in containers sold at $490-495/mt cfr Qasim. Amid rising number of offers in a comparatively slower demand environment, prices have started dropping.  


US and European suppliers continued to focus on their domestic markets amid bullish demand. January settlements in the US were at $90-100/gt. The daily index for US-origin HMS 1&2 (80:20) settled at $455/mt cfr Port Qasim, down $1.25/mt from Wednesday in the absence of major deals.


Suppliers from UAE offered #1 HMS to Pakistani buyers at $455-460/mt cfr Port Qasim. The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled at $453/mt cfr Port Qasim, down $2/mt from the prior day. Dubai yards are witnessing rebar strong demand domestically resulting in high demand for local scrap and rejecting lower bids from Indian mills.  


Steel prices stay on a downtrend on slow sales

Despite high imported scrap prices, a few mills started offering discounts on steel products. Billet prices dropped amid demand dampening due to the harsh winter season. Domestic Bala billet prices were at PKR102,500-103,500/mt ex-works Lahore, down PKR1,000/mt further on Thursday.  


On the other hand, large steelmakers are unable to bear high raw material prices and are likely to attempt another price hike in the next few days. In Karachi, major rebar makers kept their asking rates unchanged amid high ferrous scrap prices. Major mills in Pakistan are offering G-60 rebar 12-32mm at PKR140,000/mt ($872/mt) ex-works, while trades heard at PKR134,000-135,000/mt ex-works.  


Domestic scrap down

On Thursday, local Art Q toke scrap equivalent to a mix of HMS and P&S offered at PKR83,500-84,000/mt ex-yard Lahore. Pure Q Toke (shredded) offered at PKR84,500-85,000/mt ex-yards, down PKR500/mt from Wednesday. For shipbreakers, offers for scrapped vessels remained higher than the workable range.  




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