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

Domestic steel prices in Pakistan, especially for commercial billets, registered an uptick as trading recovered over the long weekend. Prices rose by PKR1,500-2,000/mt ($9-12/mt) driven by firm imported scrap prices. Prices for domestic and shipbreaking scrap also strengthened aided by healthy demand. The shipbreaking market could take a short breather after active trades. Sellers are expected to return to the market in 2021. 


The Davis Index for containerized shredded, Monday, rose by $2.06/mt from Thursday to settle at $463.13/mt cfr Port Qasim. Most suppliers were away from the market due to  the new year holidays. Indications for UK/EU-origin shredded on Monday were at $470-475/mt cfr Port Qasim. Supplier yards have already shut operations and could reopen only after Jan 4, 2021. 

In Turkey, bulk imported ferrous scrap prices are at their highest in the last nine and half years after a recent bulk deal reported. Already COVID-19 resurgence and a shortage of containers have hit trades. Exacerbating the situation is the cash flow crisis steelmakers are facing which has kept them away from the market despite depleting inventories.

Offers for Dubai-origin containerized mixed #1 HMS and P&S sarya were at prices above $445-450/mt cfr Port Qasim on Wednesday, forcing many mills on the backfoot. Harsh winter in all regions except Karachi has impacted transportation and construction activities. 


There were very few offers from Dubai suppliers as most chose to cater to the domestic market. The Davis Index for UAE-origin HMS 1&2 (80:20) settled at $448/mt cfr Port Qasim, up by $3/mt from Thursday. Asking prices were above $450-460/mt cfr Port Qasim for containers of mixed #1 HMS and P&S sarya on Monday. Bangladeshi buyers resuming inquiries for material from the UAE has also aided the price rise. Chinese allowing ferrous scrap imports through the interaction of new standards is likely to keep global ferrous scrap prices supported. With the move, trade dynamics are likely to change in the coming days. 


The index for US-origin HMS 1&2 (80:20) settled at $447.86/mt cfr Port Qasim, up by $5.36/mt from Thursday. US suppliers focused on the bulk demand in Turkey while a few offered materials to buyers in East Asia. In Europe, lockdowns due to a new strain of COVID-19 have hurt market sentiment, turning buyers cautious and keeping them away from large-volume trades. 


Global iron ore prices lost around $15/mt to reach $160/mt cfr China, with a possibility of a further decline amid easing supply. Chinese billet in the domestic market traded on Monday at CNY3,770/mt ex- Tangshan pulling export prices down $10/mt. 


Billet and domestic scrap prices rise

On Monday, domestic Bala billet prices increased by PKR1,500/mt from Thursday to PKR101,500-102,500/mt ($632-638/mt) ex-works. 

In Karachi, citing high volatility in the international scrap markets, many major mills have paused sales nationwide. On Monday, a major mill in the South hiked rebar prices to PKR127,000-128,000/mt ex-works. With the possibility of prices to cross PKR130,000/mt ex-works in the coming days. In Punjab, G-60 rebar prices heard at PKR121,000-123,000/mt ex-works.

Domestic scrap

Following strengthening global cues, prices for Art Q toke scrap equivalent to a mix of HMS and P&S were at PKR79,500-80,000/mt ex-yards Lahore. Prices Pure Q Toke (shredded) were firm at PKR81,500-82,000/mt ($507-510/mt) ex-yards. This could give imported scrap trades an impetus in Pakistan after a month-long hiatus. For shipbreakers, offers for scrapped tankers were $440-450/ldt cfr Pakistan, up by $20/mt from the prior week.



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