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

Pakistani ferrous scrap importers are mostly away as steel demand weakens with the start of Ramadan. Limited operating hours, non-availability of workers, strict COVID-19-related restrictions and fewer offers limited scrap trading over this week. 


Offers are expected to stay high amid increased container freight charges and tight availability of scrap. Usually, activities peak in Pakistan after Eid and before the Union Budget in June. 


The Davis Index for containerized shredded, Friday, settled at $463.21/mt cfr Port Qasim up $5.1/mt from Thursday. The index rose on Friday after falling in the mid-week while settled down $1.79/mt over the week. Mills booked limited volumes of shredded at $460/mt cfr port Qasim, were looking for $5/mt lower to restock anticipating good demand post-Eid. In Turkey, mills pulled their bids down with the start of Ramadan and depreciation of the lira against the US dollar.


The daily index for US-origin HMS 1&2 (80:20), Friday, rose $3.8/mt to $440/mt cfr Port Qasim from Thursday and increased $2.5/mt from the prior week. Offers were at $440-445/mt cfr Qasim while most mills were inclined to purchase UAE-origin HMS for a shorter transit period over the UK/EU and US-origins.


With the start of Ramadan and lowered operating and transportation hours, most UAE-based sellers decided to lift offers further despite slow demand. Limiting trades heard in Pakistan as Indian mills were keen on buying Dubai-origin material. The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled at $448/mt cfr Port Qasim, up to $4/mt. Offers for mixed #1 HMS and P&S from UAE rose to $460-465/mt cfr Port Qasim, depending on quality, pushing the index to $458/mt cfr Qasim.


The Davis Indexes for P&S 5ft and #1 busheling settled at $475/mt and $495/mt cfr Port Qasim, down $2/mt and stable, respectively, from the prior Friday. High-grade supply remained tight widening the price gap between medium and high-grade materials. 


High scrap price lift billet 

On Friday, Bala billets traded at PKR108,500-109,000/mt ex-works Lahore, up by PKR1,000/mt from the prior week. On a weekly basis, the index for domestic Bala billet rebounded by PKR1,250/mt to PKR108,750/mt ($703/mt) ex-works. Offers for G-60 billet heard at PKR113,500-114,000/mt ex-works Punjab. The Davis Index for G-60 billet settled at PKR113,500/mt, up PKR750/mt ex-works Punjab. 


Long steelmakers in Punjab and Karachi kept offers firm on increased input cost, despite weak demand. Trades for rebar remained comparatively slow at higher prices. Long steelmakers in Punjab and Karachi kept offers firm while many small-scale steelmakers slipped into annual maintenance on low demand.


The weekly Davis Index for rebar dropped PKR500/mt to PKR135,500/mt, ex-works Karachi, while in Punjab, the index decreased by PKR250/mt to PKR131,500/mt ex-works. Local rebar offers remained rangebound at PKR120,000-121,000/mt ex-works Punjab.


Domestic scrap up driven by imported offers 

Driven by high imported scrap offers, the weekly index for Art Q toke scrap equivalent to a mix of HMS and P&S, Friday, settled at PKR88,500/mt ex-yard Lahore, up PKR1,000/mt.


Trades for Pure Q toke scrap equivalent to shredded were at PKR89,500-90,000/mt ex-yard Lahore. The weekly index for the grade settled at PKR89,750/mt ex-yards, up PKR1,000/mt. Limited availability of imported scrap offers amid shipping line issues are driving domestic scrap trades in Pakistan.


In Gadani, demolition work slowed with the start of Ramadan and most workers returned to their hometowns. Ship melting scrap traded above PKR91,000-92,000/mt ex-yards amid tight supply. Recyclers resisted scrapped vessels or container carrier deals above $480-490/mt cnf Gadani but trades remained suspended this week. 



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