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

Pakistani steel mills resist high offers in containers as domestic steel demand remains slow. Steel prices have failed to mirror the sharp rise in ferrous scrap prices. High freight rates, approaching winter season, uncertainty around global scrap prices resulted in limited trades for imported scrap. 


The daily Davis Index for containerized shredded, Wednesday, rose by $0.44/mt to settle at $430.72/mt cfr Port Qasim. Trades for UK/EU-origin shredded reported at $425-430/mt cfr Port Qasim. Limited offers also heard at $435-440/mt cfr Port Qasim on Wednesday. Most suppliers’ yards kept offers high ahead of Christmas and New Year holidays starting from Dec 21.


The Davis Index for UAE-origin HMS 1&2 (80:20) settled at $407/mt cfr Port Qasim, up by $1/mt from Tuesday. On Wednesday, offers for HMS 1&2 (80:20) were in the range of $410-415/mt cfr Qasim amid rising competition from Indian mills to secure cheaper material. Offers for Dubai-origin containerized mixed #1 HMS and P&S sarya rose above $420/mt cfr Port Qasim due to which mills dropped restocking plans. In the UAE, rebar offers jumped sharply by $20-25/mt this week resulting in higher domestic scrap demand.  


The index for US-origin HMS 1&2 (80:20), Wednesday, settled at $410.36/mt cfr Port Qasim, up by $2.11/mt from Tuesday. Medium-scale Pakistani mills are buying limited volumes just to keep their operations running. Harsh winter in many rural regions of the country has halted construction. Large infra projects which are catered by leading steelmakers are witnessing cash flow issues. While the sharp rise in steel prices has led many builders and contractors to revise their project costs resulting in slower demand from such projects.  


Domestic rebar prices fail to copy the rise in scrap

In the southern region, rebar prices rose but are still below the offers from major mills. Rebar traded at PKR118,000-120,000/mt ex-works Karachi. In Punjab, G-60 rebar prices heard at PKR115,000-116,000/mt ex-works. 


Bala billet prices were stable with trades at PKR92,000-92,500/mt ($574-577/mt) ex-works Punjab on Wednesday. Many traders and stockists offered discounts to encourage sales. Despite rising prices, steel demand remains unsupportive of production ramps. Many small mills could also cut production in winter.  


Prices for Art Q toke scrap equivalent to a mix of HMS and P&S rose to PKR73,500-74,000/mt ex-works Lahore. Trades for the Pure Q Toke (shredded) were at PKR75,000-75,500/mt ($457-461/mt) ex-yards, with offers still above PKR75,500-76,000/mt ex-yards. In the shipbreaking market, scrapped tankers and container offers surpassed $400-410/ldt cfr Pakistan.




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