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

Pakistani buyers continued trades for shredded, albeit, in very limited volumes to refill inventories before Ramadan. After a slow start this week, trades improved but are yet to normalize as many buyers are still away from the market. Holiday mood also hindered business sentiment as workers in some cities fear the resurgence of COVID-19. Active restocking is less likely given that less than 20 days are left for the start of Ramadan. 


The Davis Index for containerized shredded, Friday, settled at $433.21/mt cfr Port Qasim up $1.78/mt from Thursday. Mills concluded shredded booking at $430-435/mt cfr Qasim pushing the index up by $5.71/mt from the prior week. Suppliers’ expectations, however, remained above $435-440/mt cfr Qasim. Also, despite increasing supply from yards, a hike in container freight increased the landed cost of scrap. 


Pakistani buyers are waiting for Turkish mills to resume bulk purchases to gain more clarity on shredded prices, believe suppliers. 

In Turkey, indications for HMS 1&2 (80:20) in bulk were around $415-420/mt cfr Turkey, pushing the index marginally up on Thursday. 


The daily index for US-origin HMS 1&2 (80:20), Friday, settled at $412.5/mt cfr Port Qasim, unchanged from Thursday and last Friday. Very few major deals heard amid healthy domestic markets. But buyers were keen to get material booked at the earliest to receive deliveries latest by early April and avoid transportation delays during Ramadan. 


Offers for #1 HMS and P&S from UAE, however, recovered to $420-430/mt cfr Port Qasim, depending on quality. The market is hopeful that the Suez Canal blockage clears, as expected, in the next two days and does not lead to any more shipping challenges. The Davis Index for UAE-origin HMS 1&2 (80:20) settled at $411/mt cfr Port Qasim, stable from Thursday while up $6/mt from a week earlier. A few trades reported at $410-415/mt cfr Port Qasim on improved demand. Yet buyers are less interested in HMS due to additional taxes applicable on HMS imports compared to shredded. 


The Davis Indexes for P&S 5ft and #1 busheling settled at $445/mt and $460/mt cfr Port Qasim, up $5/mt from the prior Friday. Sellers are struggling with the non-availability of containers and margin squeeze due to high freight rates. Scaling back of auto production due to a shortage of semiconductors could impact generations of prime grade scrap.


Domestic steel warms up, demand slow 

On Friday, Bala billet traded at PKR106,500-107,000/mt ex-works up from the PKR105,000/mt ex-works last week. On a weekly basis, the index for domestic Bala billet increase by PKR1,250/mt to PKR106,250/mt ($686/mt) ex-works. 


The Davis Index for G-60 billet settled at PKR110,750/mt, up PKR2,50/mt ex-works Punjab. Demand is expected to pick up gradually ahead of Ramadan and continuous recovery in infrastructure projects. 


Asking rates for rebar increased amid improving demand. The weekly Davis Index for rebar increase by PKR500/mt to PKR135,000/mt ex-works Karachi, while in Punjab, the index increased by PKR1,000/mt to PKR130,500/mt ex-works. Domestic steel demand has been slower-than-expected for over a month. The availability of lower-priced steel in the Punjab market has held prices stable. 


Domestic scrap rebounds on tight supply

On rising demand, the weekly index for Art Q toke scrap equivalent to a mix of HMS and P&S, Friday, settled up by PKR1,000/mt ($6/mt) to PKR86,500/mt ex-yard Lahore. 


Trades for Pure Q toke scrap equivalent to shredded were at PKR88,000-88,500/mt ex-yard Lahore. The weekly index for the grade settled at PKR88,500/mt ex-yards, up PKR2,000/mt. Delays in imported scrap deliveries amid shipping line issues are driving domestic scrap trades in Pakistan. 


In Gadani, inflows of vessels dropped amid concerns around rising COVID cases. Offers for scrapped vessels ranged from $460-480/ldt cnf stable this week.



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