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

Only large-scale mills in Pakistan mills booked imported scrap on Tuesday and Wednesday amid low inventories and tight domestic availability. Smaller mills, however, postponed purchases waiting for a clear price direction from global markets on fears of the delta variant of the virus spreading a new wave of COVID-19 infections.


On Thursday, domestic trade activities could stay slow or even pause, due to a national banking holiday at the beginning of the new financial year. But, demand is expected to rise subsequently. 

Domestic steel prices continued to rise following high raw material import costs. A gap between steel prices in the global market and Pakistan could also support steelmakers to raise offers. 


The daily Davis Index for containerized shredded, Wednesday, was at $536.25/mt cfr Port Qasim, up by $0.18/mt. Deals for shredded were reported at $534-537/mt cfr Port Qasim. Most sellers kept offers above $538-543/mt cfr against bids of $532-535/mt cfr Qasim. 


Amid stable demand and increased inquiries, UAE sellers kept offers firm. The Davis Index for UAE-origin HMS 1&2 (80:20), Wednesday, settled unchanged at $485/mt cfr Port Qasim. Deals for UAE-origin mixed #1 HMS and P&S were at $495-500/mt cfr Port Qasim. Some sellers even offered material at prices above $500/mt cfr Qasim.


The index for US-origin HMS 1&2 (80:20), Wednesday, settled at $497.5/mt cfr Port Qasim, unchanged from Tuesday. Availability of scrap from the US and the UK remains tight on steady demand in their respective domestic markets. Container freight rates remained elevated resulting in increased landed costs. HRC prices in the US market rose above $1800/nt ex-works scaling new record levels. Market sentiment was bullish on infra projects and funds infusion announced by the country.  


In Turkey, imported ferrous scrap offers remained firm as buyers are expected to resume trades. The announcement of Russia levying export taxes on steel products and ferrous scrap of EUR70/mt at the minimum, could also lift prices in the global markets. Russian mills are likely to offer material in the export market and liquidate inventories before the taxes take effect on August 1. The daily Davis Index for imports of US-origin HMS 1&2 (80:20) was at $499.52/mt cfr Turkey on Tuesday, up by $0.02/mt. 


Ahead of the financial year-end, many mills were busy closing their accounts. On tight supply for ferrous scrap and the resulting rise in input costs, major rebar producers mills mull another price hike for rebar. Trades improved at asking rates of PKR150,500/mt ex-works Karachi and PKR149,000-149,500/mt ex-works Punjab. 


Domestic Bala billet prices continued to rise amid improving demand. On Wednesday, deals were reported at PKR119,500-120,000/mt ex-works, up PKR1,000/mt from the day prior. Offers for G-60 billet were at PKR125,000-126,000/mt ex-works Punjab.


Amid firm imported scrap offers and tight domestic supply, the prices for Art Q toke scrap (equivalent to a mix of HMS and P&S) and Pure Q toke scrap (equivalent to shredded) maintained upward movement rising by PKR500-700/mt to PKR95,500-95,800/mt and PKR97,000-97,300/mt ex-yard Lahore, respectively, on Wednesday.


Gadani shipbreakers placed the highest bids for scrapped vessels in the subcontinent. Offers were above $560-570/ldt cfr Qasim.


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