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

Pakistani mills avoided new bookings amid softening ferrous scrap prices. Bid prices fell further on Friday extending the downtrend that started on Wednesday. Several suppliers and traders are offering materials, but buyers have turned silent. A few leading yards are still bullish citing this as a temporary downside in the market. They expect prices to turn around next week with the revival of demand.


A few distressed sales at prices $20-25/mt lower than most offers heard on Friday, said traders. The daily Davis Index for containerized shredded, Friday, dropped by $7.13/mt to $488.06/mt cfr Port Qasim. Prices fell $2/mt from the prior week. Mills are targeting $475-480/mt cfr Qasim for shredded in containers. Offers for the UK/EU and the US in containers heard above $485-490/mt cfr Qasim. While a few traders and indenters were under pressure to reduce their positions before prices drop further and sold shredded at $465-470/mt cfr Qasim as per sources. 


The daily index for US-origin HMS 1&2 (80:20) settled at $451.5/mt cfr Port Qasim, down $3.75/mt from Thursday in the absence of major deals. In Turkey, bulk prices came under pressure mills stayed away or bid at or below $470-475/mt cfr Turkey. 


Suppliers from UAE offered #1 HMS to Pakistani buyers at $450-455/mt cfr Port Qasim. The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled at $447/mt cfr Port Qasim, down $6/mt from the prior day. Dubai-based yards focused on strong demand from domestic rebar makers and rejected lower bids from Indian mills on Friday. There is a gap of over $40/mt between HMS and shredded which could force mills to prefer HMS from the Middle East as it is significantly cheaper. 


The weekly Davis Indexes for P&S 5ft and #1 busheling settled at $488/mt and $503/mt cfr Port Qasim, respectively, down $5/mt and $2/mt, respectively. Offers rose in sync with global cues, but no deals heard at higher prices. 


Steel prices drop on slow sales

Despite high imported scrap prices, a few mills have started offering discounts on steel products. Billet prices dropped amid slow demand amid harsh winter in some regions. Domestic Bala billet indications were at PKR102,500-103,500/mtex-works Lahore. The weekly index for domestic Bala billet increased PKR3,750/mt to PKR103,750/mt ($646/mt) ex-works. The Davis Index for G-60 billet settled at PKR115,000/mt ex-works Punjab, down PKR500/mt from Jan 8. 


All major rebar makers have hiked prices citing high ferrous scrap in the international market. The weekly Davis Index for rebar G-60 rose PKR2,500/mt to PKR137,500/mt ex-works Karachi, while in Punjab the index increased PKR2,000/mt to PKR131,500/mt ex-works. 


A major mill in Pakistan is offering G-60 rebar 12-32mm at PKR140,000/mt ($872/mt) ex-works, while trades heard at PKR135,000-138,000/mt ex-works including discounts. Local rebar offered at PKR115,000-120,000/mt ex-works.


Amid the recent drop in imported scrap prices, rebar sales paused on Friday as buyers anticipate a similar drop in finished steel prices in the next few days. Mills in Karachi, however, kept their asking rates unchanged this week. 


Domestic scrap down

The weekly index for Art Q toke scrap equivalent to a mix of HMS and P&S Friday rose by PKR1,750/mt ($8/mt) to PKR84,250/mt ex-yard Lahore. The weekly index for Pure Q Toke (shredded) dropped by PKR2,000/mt to PKR85,500/mt ex-yards amid falling imported scrap prices. For shipbreakers, trades slowed this week as offers for scrapped vessels firmed at around $450/ldt cfr Pakistan.



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