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

Domestic steel prices in Pakistan jumped up by PKR6,000-6,500/mt ($31-37/mt) driven by firm imported scrap prices. Prices for domestic and shipbreaking scrap also strengthened aided by healthy demand. 

Trades for imported scrap were limited since buyers were unwilling to restock material at the current offer levels, which are at a record high. Heavy winters and limited cash flow also impacted their decision. Only mills with urgent requirements bought minimal volume to keep their operations running. 


The daily Davis Index for containerized shredded, Thursday, rose by $3.29/mt to settle at $461.07/mt cfr Port Qasim. Prices rose by $23.15/mt from a week ago. Most suppliers were away from the market due to the upcoming holidays. Offers for UK/EU-origin shredded on Thursday were at $460-475/mt cfr Port Qasim. Supplier yards have already shut operations and could reopen only after Jan 4, 2021. Global uncertainties also stopped leading steelmakers from booking material despite depleting inventories. 


The index for US-origin HMS 1&2 (80:20) settled at $442.50/mt cfr Port Qasim, up by $1.79/mt from Wednesday and $27/mt up from Dec 18. US suppliers focused on bulk demand in Turkey, while a few offered materials to buyers in East Asia.

The weekly Davis Indexes for P&S 5ft and #1 busheling settled at $465/mt and $473/mt cfr Port Qasim, up by $22/mt and $15/mt, respectively. Deals for busheling and 4a/4c scrap in limited quantity were heard at $470-475/mt cfr Qasim. Offers for cast iron, rotor, and drums from the US were at $455-465/mt cfr Pakistan, at prices higher by $30/mt from the prior week. 


Offers from Dubai suppliers were very few since most chose to cater to the domestic market. The Davis Index for UAE-origin HMS 1&2 (80:20) settled at $445/mt cfr Port Qasim, up by $3/mt from Wednesday. Asking prices increased by $30-35/mt in a week and were above $445-450/mt cfr Port Qasim for containers of mixed #1 HMS and P&S sarya. The rise was largely driven by bullish commercial billet prices in Pakistan. 


Global iron ore prices declined for two successive days losing around $12/mt to $163/mt cfr China, with a possibility of a further decline. 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. 


Domestic scrap

Severe winter in many rural regions of the country has halted construction, while large infra projects catered by leading steelmakers faced cash flow issues. 

The index for Art Q toke scrap equivalent to a mix of HMS and P&S Thursday surged by PKR3,500/mt to PKR77,750/mt ex-yard Lahore from late last week. The weekly index for Pure Q Toke (shredded) rose by PKR4,250/mt to PKR79,500/mt ex-yards, in line with rising imported scrap prices. For shipbreakers, offers for scrapped tankers were $440-450/ldt cfr Pakistan, up by $20/mt from the prior week.


Billet prices soar 

On Thursday, domestic Bala billet prices increased by PKR6,500/mt to PKR99,500-100,000/mt ($595-598/mt) ex-works, pushing the weekly index up by the same amount from Dec 18. The Davis Index for G-60 billet settled at PKR106,000/mt ex-works Punjab, up PKR6750/mt from Dec 18. Many small mills opted for production cuts during winter to match the supply and demand gap.  


Many major Karachi-based major mills have paused sales nationwide citing volatility in the international scrap markets and the resulting surge in prices. The weekly Davis Index for G-60 rebar rose PKR5,750/mt to PKR123,500/mt ex-works Karachi. While in Punjab, it increased by PKR4250/mt to PKR120,500/mt ex-works Punjab from prior Friday. A major mill in the South hiked rebar prices since Dec 23 to PKR125,000-126,000/mt ex-works. But after the rise trades suffered forcing mills to offer discounts this week. 




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