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

Pakistan mills resumed trades for imported scrap, buying actively at higher prices. Mills kept steel prices high and made sure that previous price hikes are absorbed well locally. Harsh winter in many regions of the country remained a concern as it affects demand. Mills purchased most of the tonnages being offered in the India subcontinental this week but offers were insufficient to cater to the rising demand.    


The daily Davis Index for containerized shredded, Friday, settled flat at $490/mt cfr Port Qasim. The index jumped by $20/mt from prior Thursday. Early this week, several trades were reported ranging at $475-485/mt cfr Qasim while in the later half, trades for EU/UK-origin containerized shredded were reported at index prices. Offers on Friday rose to $495-500/mt cfr Qasim.There is a gap of over $40/mt between HMS and shredded which could force a few re-rollers and HRC makers to prefer HMS from the Middle East as it is significantly cheaper.  


Strong demand amid low inventories and limited supply boosted competition to secure materials globally. A few mills are still preferring to wait for clarity from Turkish booking for February and March shipments, prices of which are soon expected to cross $500/mt cfr Turkey for bulk scrap. Recyclers are bullish about the remaining 10-12 February shipment cargoes and resumption of Chinese ferrous scrap imports could offer additional support.  


The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled at $450/mt cfr Port Qasim, up $1/mt. UAE suppliers sold #1 HMS to Pakistani buyers at $455-460/mt cfr Port Qasim while offers for containers of mixed #1 HMS and P&S sarya on Friday were at $460/mt cfr Qasim. Dubai suppliers preferred to sell materials in Pakistan over India, where bids are lagging by over $25/mt. The daily index for US-origin HMS 1&2 (80:20) settled at $454.25/mt cfr Port Qasim, up by $4.2/mt from the prior week.  


The weekly Davis Indexes for P&S 5ft and #1 busheling settled at $493/mt and $505/mt cfr Port Qasim, up by $13/mt and $26/mt, respectively. Offers jumped following global cues however, deals were very limited. US recyclers are targeting a sharp price hike driven by a bullish US domestic market which rose $90-100/gt this week. There is a short supply of metallics worldwide and the situation is expected to persist a couple of months.  


Billet and rebar  

After witnessing a sharp jump last week, it took time to absorb these hikes over this week maintaining an uptrend. The weekly index for domestic Bala billet increased by PKR1,125/mt to PKR107,500/mt ($671/mt) ex-works. The Davis Index for G-60 billet settled at PKR115,500/mt ex-works Punjab, up PKR3,000/mt from Dec 31.  

All major rebar makers have hiked prices citing high ferrous scrap in the international market. The weekly Davis Index for rebar G-60 12-32mm rose PKR4,000/mt to PKR135,000/mt ex-works Karachi while in Punjab, it increased by PKR4,000/mt to PKR129,500/mt ex-works. 

Amreli, ASG steel and Agha steel held prices firm. A major mill is said to target next sales for G-60 rebar at asking rates PKR140,000/mt despite sales of finished steel being slow amid the liquidity crunch. Local rebar was offered at PKR116,000/mt ex-works.  


Domestic scrap

The weekly index for Art Q toke scrap equivalent to a mix of HMS and P&S Friday rose by PKR1,000/mt ($8/mt) to PKR86,000/mt ex-yard Lahore. The weekly index for Pure Q Toke (shredded) rose by PKR1,000/mt to PKR87,500/mt ex-yards amid lower availability and strong global cues. For shipbreakers, the new year came with demand uptick and tight supply as offers for scrapped vessels climbed by $10/mt to $450/ldt cfr Pakistan.




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