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

Pakistani ferrous scrap importers Friday booked limited volumes as offers rose sharply while domestic steel demand continued to lag. High global scrap market forced mills to slip into a wait-and-watch mode this week. Few mills opined scrap offers should correct for them to resume trades but the supply of imported scrap remained tight. 


The Davis Index for containerized shredded Friday settled at $328/mt cfr Port Qasim, up $2/mt from Thursday and up $8/mt from the prior Friday. Trades for UK-origin shredded reported at $325-328/mt cfr Qasim as offers from yards strengthening amid tight supply. Mills in Pakistan actively enquired for imported scrap pushing most offers to $330/mt cfr Qasim on Friday. Steelmakers remain optimistic of a recovery in construction steel demand. 


Leading steelmaker Agha Steel plans to raise PKR3.6-5bn ($21-30mn) through an initial share sale to triple its production capacity. Pakistan’s steel industry is banking heavily on construction activities which are expected to boost demand for finished steel products over the long term. Capacity expansion by steelmakers like Naveena Steel and IIL industries is also on cards. 


The Davis Index for UAE-origin HMS 1&2 (80:20) Friday settled at $310/mt cfr Port Qasim, up marginally from Thursday and up $4/mt from the prior week. Trades for UAE-origin mixed #1 HMS and P&S sarya scrap were at $312-315/mt cfr Port Qasim varying by quality. Offers from South African suppliers were at $310/mt cfr Qasim.


The index for US-origin HMS 1&2 (80:20) settled at $308/mt cfr Port Qasim, up $1/mt as most offers were at $310-312/mt cfr Qasim against bids of $305/mt cfr Qasim. 


In the bulk market, imported HMS 1&2 (80:20) offers from the US West Coast suppliers were at $330/mt cfr Qasim with limited buying interest. The index for US-origin HMS 1&2 (80:20) was at $308/mt cfr Port Qasim, up by $2/mt from a week ago. Trades were reported at around $305-310/mt cfr Port Qasim early week. While a few US yards were quoting HMS 1&2 (80:20) at $310-315/mt cfr Port Qasim on Friday refusing lower bids from potential buyers.


The weekly Davis Index for HMS 1&2 (80:20) from the UK and Europe Friday settled at $305.83/mt cfr Port Qasim, up by $10.83/mt a week ago. A sharp jump in offers from UK yards pushed the index up, albeit trades, were limited against bids of $300/mt cfr Port Qasim. 

The index for Latin American HMS 1&2 (80:20) settled at $303.75/mt cfr Port Qasim, up by $5.5/mt from the prior week. Brazilian traders offered no supplies amid a strong domestic market. A few trades for LMS from Caribbean suppliers reported at around $270/mt cfr Qasim. 


The Davis Indexes for P&S and busheling settled at $325/mt and $338/mt cfr Port Qasim, up by $5/mt and $6/mt, respectively, from the prior week. Trades for both grades were customized per mills’ requirements. Brazilian and UK-origin busheling traded at $335-340/mt cfr Qasim while offers jumped up to $345/mt, cfr Qasim, on Friday.


Domestic steel 

Domestic steel prices remained flat to up in Pakistan amid higher imported ferrous scrap prices. The weekly Davis Index for commercial Bala billet, Friday settled at PKR92,000/mt ($553/mt) ex-works Punjab, inclusive of local taxes, up PKR1,000/mt from the prior week. Trades concluded at PKR92,000-92,500/mt ex-works on Friday. Buyers reduced purchase volumes due to a cash crunch. The Davis Index for G-60 billet settled at PKR97,000-97,500/mt ex-works Punjab, with the index rising PKR500/mt from the prior week. 


The weekly Davis Index for G-60 rebar settled at PKR108,500/mt ($652.5/mt) ex-works Karachi, down by PKR3250/mt from the prior week. Heavy rains impacted trades in the country. Rebar trades concluded at discounted levels around index prices against offers of PKR110,000/mt ex-works Karachi this week. In Punjab, G-60 rebar prices dropped by PKR2,125/mt to PKR110,000/mt ex-works from the prior week amid subdued demand.


Finished steel prices in Southern Pakistan were under pressure as leading steelmakers offered discounts to liquidate inventories. Gadani’s shipbreaking market was upbeat fuelled by strong global cues. Scrapped containers and tankers were offered at $360-370/ldt, up $10/ldt from the prior week.


Domestic scrap

High imported scrap prices pushed domestic Pure Q toke scrap equivalent to shredded to PKR71,000/mt ex-works Lahore on Friday, up by PKR500/mt from early this week. The weekly index for Pure Q Toke (shredded) ex-Pakistan yard was at PKR71,625/mt, up PKR275/mt from the prior week. Trades for the grade were heard at PKR71,500-72,000/mt delivered to mill. 




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