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

In Pakistan, tight availability of domestic scrap has pushed prices up. Many mills thus opted for prime grades of imported ferrous scrap. Bids by Pakistani mills for containerized scrap were more attractive compared to those by Indian or Bangladeshi buyers. 

Expectations of infrastructure projects gaining momentum in the new financial year, which began on July 1, kept sentiment positive. 


Offers for domestic Art Q toke scrap (equivalent to a mix of HMS and P&S) were above PKR96,700-97,000/mt ex-yard Lahore while Pure Q toke scrap (equivalent to shredded), Monday, traded in the range of PKR98,500-98,800/mt ex-yard Lahore, up by PKR1,200-1,500/mt from Friday. Due to a slow pace of demolition and ship-breaking activities, prices trended up. 

The daily Davis Index for containerized shredded, Monday, was at $537.5/mt cfr Port Qasim, down by $2.5/mt. Deals for containerized shredded were reported at $535-538/mt cfr Qasim. Yet sellers kept expectations over $540/mt cfr Qasim amid tight containers availability and hopes of recovery in global cues in China and Turkey. China steel futures rose 2-3pc on Monday, while Turkish domestic rebar prices were up by $10/mt on Friday from the preceding day. 


Deals for UAE-origin HMS were limited, but supply crunch in the domestic market supported bids by Pakistani mills. The daily Davis Index for UAE-origin HMS 1&2 (80:20), Monday, settled at $488/mt cfr Port Qasim, up by $1/mt from July 2. Deals for UAE-origin HMS 1&2 (80:20) reported at around $490/mt cfr Qasim while offers for mixed #1 HMS and P&S were at $500-505/mt cfr Port Qasim Monday. 


The daily index for US-origin HMS 1&2 (80:20), Monday, settled unchanged at $501.25/mt cfr Port Qasim from Friday. Container freight rates remained elevated, resulting in increased landed costs. In the US domestic market, July monthly settlements are expected to stay flat to up. HRC prices were above $1,850/nt ex-works, keeping demand for ferrous scrap healthy.


Domestic steel demand stable 

Amid tight supply for ferrous scrap and the resulting rise in input costs, major rebar producers in North and South regions could raise prices further. For rebar, prices were unchanged at PKR150,500/mt ex-works Karachi and PKR149,500/mt ex-works Punjab. Participants believe that the market has absorbed recent price hikes. Local rebar offers were above PKR132,000-132,500/mt ex-works Lahore.

A gap between steel prices in the global market and Pakistan could support steelmakers to raise offers further. 

Domestic Bala billet prices rose on improved demand. From Friday, offers rose by another PKR1,000/mt ($8/mt) to PKR121,000/mt ($780/mt) ex-works. Offers for G-60 billet were at PKR126,500/mt ex-works Punjab.


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