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

Pakistani ferrous scrap importers started resisting high offers on Friday and decided to hold purchases until there is clarity on price direction. Limited domestic steel trades post-Eid and non-acceptance of the PKR5,000/mt hike in rebar prices by builders and end-users cooled sentiment in the second half of the week.  


Offers have remained firm in containers amid bullish domestic sentiment in the supplier destinations. HRC and rebar prices in the US and Europe maintained an uptrend. But in South Asia steel demand failed to pick up. Also, a drop in Chinese steel prices forced buyers to step back for further clarity.   


The daily Davis Index for containerized shredded, Friday, settled at $515.25/mt cfr Port Qasim, down $3.32/mt from Thursday and down by $4.25/mt from the prior Friday. Offers for shredded from the EU/UK were in the range of $515-525/mt cfr Qasim while buying interest was around $510/mt cfr Qasim. 


In Turkey, mills booked a couple of bulk cargoes from the Baltic suppliers paying slightly higher prices. Offers continued to rise on tight supply. The daily Davis index for US-origin HMS 1&2 (80:20) rose to $510.38/mt cfr Turkey up $0.99/mt from Thursday.


A successive drop in Chinese steel prices over the week weighed on Asian steel prices, while domestic demand failed to encourage more restocking. Mills also limited their purchases to immediate melt requirements and started resisting high offers in the second half of the week.   


The daily Davis Index for UAE-origin HMS 1&2 (80:20), Friday, settled at $502/mt cfr Port Qasim, down $3/mt, but the index was up by $2/mt from last Friday. Offers for UAE-origin mixed #1 HMS and P&S dropped driven by lower prices in India. Trades in containers from UAE had concluded for P&S at $515-518/mt cfr Qasim and #1 HMS at $510/mt cfr Qasim early week. 


The daily index for US-origin HMS 1&2 (80:20), Friday, settled at $503.75/mt cfr Port Qasim, down $2.32/mt. The index inched down by $1.25/mt from the prior Friday. Offers were firm, driven by high global steel prices and buyers’ preference for short-transit scrap.


The Davis Index for P&S 5ft and #1 busheling on Friday settled at $530/mt and $550/mt cfr Port Qasim, respectively, down $5/mt from the prior Friday. Supply for prime grades remained tight while firm buying interest in Turkey fueled sellers to focus on fulfilling bulk demand over containers. Offers for high-grade scrap remained firm.


Steel trades fail to pick up  

In the domestic market, even after returning from the Eid holidays, steel trades remained sluggish. High input costs reflected in an increase in asking rates, however, markets were not fully operational. The index for domestic Bala billet rose by PKR500/mt to PKR112,500/mt ($733/mt) ex-works. The weekly Davis Index for G-60 billet rose to PKR117,000/mt ex-works Punjab, up PKR1,000/mt from prior Friday. 


Offers for rebar from large steelmakers remained elevated at PKR142,500-143,500/mt ex-works Karachi after a hike of at least PKR5,000/mt. In Lahore, prices lowered by PKR4,000-5,000/mt than Karachi levels to PKR136,000-137,000/mt ex-works. Local rebar offered at PKR130,000/mt ex-works. The weekly Davis Indexes for rebar rose to PKR142,750/mt, up PKR6,750/mt ex-works Karachi and PKR136,500/mt ex-works Punjab, up PKR4,250/mt, respectively. 


Domestic ferrous scrap supply remained tight. The weekly indexes for Art Q toke scrap equivalent to a mix of HMS and P&S and Pure Q toke scrap (equivalent to shredded), Friday, settled at PKR91,000/mt and PKR92,000/mt ex-yard Lahore, up PKR500/mt respectively. 

The Pakistani rupee, Friday, depreciated to near PKR153.5 against the US dollar from PKR152 last week.



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