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

Pakistani steel mills continued to stay away from booking significant volumes this week. But few sellers turned bullish in the second half of the week, despite weak demand due to the resurgence of COVID-19 in the Indian subcontinent. As inventories have remained below par, traders remain hopeful of active purchases amid a pick-up in steel demand post-Eid.


UK-based suppliers refused to trade at current bids due to increased containerized freight charges and weakness in the British pound. In Turkey, a couple of more bulk cargoes traded at $427/mt cfr Turkey for US-origin HMS 1&2 (80:20) after receiving good rebar export offers from Asian markets. 


The daily Davis Index for containerized shredded, Friday, settled at $460.25/mt cfr Port Qasim up $1.5/mt from Thursday. The index recovered partially after a fall mid-week and settled down $3/mt from the prior Friday. In the coming days, surge in demand is expected as inventories will need restocking. 


The daily index for US-origin HMS 1&2 (80:20), Friday, rose $2.5/mt to $440/mt cfr Port Qasim — stable from prior week. Offers were at $440-445/mt cfr Qasim while most mills were inclined to purchase UAE-origin HMS for a shorter transit period over the UK/EU and US-origins. Most mills are expected to resume purchases in the coming days to restock.


Offers from most UAE-based sellers bounced back after falling early in the week. Limited operation and transportation hours along with annual maintenance activities and increased power consumption has impacted supplies. The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled at $442/mt cfr Port Qasim, up by $4/mt from Thursday while down $6/mt from the prior week. Offers for mixed #1 HMS and P&S from UAE dropped by $10/mt from prior Friday to $450-455/mt cfr Port Qasim, depending on quality, weighing down the index to $452/mt cfr Qasim.


The Davis Indexes for P&S 5ft and #1 busheling settled at $472/mt and $492/mt cfr Port Qasim, respectively, marginally down by $3/mt each from prior Friday. Prime-grade supply remained tight keeping offers high from most suppliers. 


Steel demand to gradually improve

In the domestic market, Bala billet traded at PKR109,300-109,500/mt ex-works Lahore, up by PKR500-800/mt from the prior week. On a weekly basis, the index for domestic Bala billet rose by PKR500/mt to PKR109,250/mt ($711/mt) ex-works. Offers for G-60 billet were heard at PKR113,500-114,000/mt ex-works Punjab on Friday. The weekly Davis Index for G-60 billet settled unchanged at PKR113,500/mt ex-works Punjab. 


Some stockists have lowered discounts, expecting an improvement in finished steel demand. Long steel producers in Punjab and Karachi kept offers firm, while many small-scale steelmakers have decided to go for annual maintenance amid weak domestic demand. Local rebar offers remained elevated amid a ramp-up in construction activities. 


The weekly Davis Index for rebar remained at PKR135,500/mt, ex-works Karachi, while in Punjab, the index rose by PKR500/mt to PKR132,000/mt ex-works. Local rebar sold at PKR120,000-121,000/mt ex-works Punjab. 


Flat steel product prices remained on an uptrend as producers including Aisha International and Hadeed Steel hiked prices. CRC prices for medium thickness were at PKR168,000-170,000/mt ex-works amid global HRC prices hitting a record high in the US and Europe, and decade-high in China.


Domestic scrap up on firm imported offers

Driven by high imported scrap offers, the weekly index for Art Q toke scrap equivalent to a mix of HMS and P&S, Friday, settled at PKR89,500/mt ex-yard Lahore, up PKR1,000/mt.


Trades for Pure Q toke scrap equivalent to shredded rose to PKR90,500-91,000/mt ex-yard Lahore. The weekly index for the grade settled at PKR91,000/mt ex-yards, up PKR1,250/mt. 


In Gadani, demolition work has slowed since the start of Ramadan. Recyclers are not keen on offers of $490-500/ldt for scrapped vessels after buying actively in early April. Shipbreaking plates 16mm were offered at PKR102,000/mt ex yards on Friday.





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