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

Pakistani mills continued trades for imported ferrous scrap despite offers climbing a months’ high. Most mills anticipate strong steel demand post-Eid holidays and continued restocking of scrap. Elevated freight rates and the non-availability of containers added to the challenges faced by importers as worry about on-time delivery. Buying appetite, however, may slow with Ramadan starting from April 13. 


After India and Bangladesh, Pakistan’s government announced new restrictions on public mobility amid another wave of COVID-19 infections. Steel production has not been hampered as workers are asked to continue works with more precautions. But a slowdown in other commercial activities may be seen from next week onwards.


The Davis Index for containerized shredded, Wednesday, settled at $463.46/mt cfr Port Qasim up $3.46/mt from Tuesday. Mills booked limited volumes of shredded ranging $460-465/mt cfr Qasim prompting most UK and EU-based suppliers to hold their offers at $465-470/mt cfr Qasim. Despite increasing supplies at yards, a hike in container freight rates increased the landed cost of scrap. 


In Turkey, a few mills have resumed trades for May and June shipments. A couple of bulk trades pushed up prices of US-origin HMS 1&2 (80:20), up $5-6/mt to $432-433/mt cfr Turkey. After Easter weekend, most suppliers reopened for business and are waiting for actual prices direction.


The daily index for US-origin HMS 1&2 (80:20), Wednesday, settled at $434.29/mt cfr Port Qasim, up $0.54/mt from Tuesday. Offers were at $435-440/mt cfr Qasim while mills were largely inclined to purchase UAE-origin HMS. Very few seaborne deals heard as HRC prices in the US rose to over $1,350/st ex-works on increased consumption.


Offers for mixed #1 HMS and P&S from UAE were at $445-450/mt cfr Port Qasim depending on quality. The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled at $442/mt cfr Port Qasim, up $2/mt from a day prior. Amid a shortage of material due to active domestic demand from all subcontinental markets, offers could rise further this week.


Billet prices lose steam

On Wednesday, Bala billet offers remained unchanged at PKR107,500-108,000/mt ex-works Lahore. Trades for G-60 billet heard at PKR112,000-112,500/mt ex-works Punjab, albeit, in limited quantities, down BDT500-1000/mt. Demand for billet has remained subdued resulting in limited trades for imported scrap. HRC producers, however, have announced a price hike by PKR2,500-3,000/mt for April shipments amid strong international prices and bullish auto demand. 


Long steelmakers in Punjab and Karachi held offers high on increased input costing. Trades for rebar remained comparatively slow at higher prices. Rebar offers were at PKR131,500-132,000/mt ex-works Lahore and PKR121,000-122,000/mt ex-works Punjab.


Domestic steel prices are anticipated to see gradual improvement but an appreciation in the currency and steady domestic fundamentals could support steel demand. Market participants are pinning their hopes on another round of big infrastructure push and cash infusion through the fiscal budget to be announced in June. 


Domestic scrap prices stable 

Prices for Art Q toke scrap equivalent to a mix of HMS and P&S, Wednesday, remained unchanged at PKR88,000-88,500/mt ex-yards Lahore since Monday. Trades for Pure Q toke scrap equivalent to shredded continued at PKR89,500-90,000/mt ex-yard Lahore.


In Gadani, demolition work slowed after intense activity during the past 10 days. Recyclers resisted scrapped vessels or containers carriers deals above $480-490/mt cnf Gadani. 



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