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

Imported ferrous scrap trades slowed this week in Pakistan as mills stepped back following a downtrend in Turkey. Bids for imported scrap dropped as mills aimed lower. On the other side, domestic steel prices jumped by around PKR5,000/mt again for the second successive week following currency depreciation and high input costs. 


Pakistani rupee continued to depreciate against the US dollar to reach PKR164.09 on Aug 6, from PKR165.6 on July 30. The rupee has depreciated by around 8pc from 152.3 on May 15.


Shredded scrap prices continued their downtrend this week. The daily Davis Index for containerized shredded, Friday, dropped $2.5/mt to settle at $527.5/mt cfr Port Qasim on low bids. The index dropped by $14.5/mt from last Friday. A few deals for the UK and EU-origin shredded reported at $525-530/mt cfr Qasim. 


In Turkey, mills are expected to resume bookings for the remaining September shipments next week. Domestic rebar prices in Turkey fell by $10-15/mt amid piling up of inventories. The index for the US-origin HMS 1&2 (80:20) Friday fell to $463.48/mt cfr Turkey, down $7/mt from July 30. 


Demand for the UAE origin HMS was stable in India and Pakistan this week. The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled unchanged at $493/mt cfr port Qasim. From July 30, the index dropped $7/mt. Trades for UAE-origin mixed #1 HMS and P&S continued at $505-515/mt cfr Port Qasim amid supported spread between ferrous scrap and finished steel.


The daily index for US-origin HMS 1&2 (80:20), Friday, settled at $487.5/mt cfr Port Qasim unchanged from Thursday and down $10/mt from the prior Friday. Containerized export offers dropped for the second successive week on the US East Coast. Amid a drop of $25-30/mt in US domestic monthly settlements for the August deliveries, some sellers started offering low amid supply easing out. 


From prior Friday, the Davis Index for P&S 5ft dropped $17/mt to settle at $535/mt cfr while the index for #1 busheling at $555/mt cfr Port Qasim, down by $17/mt. Following softening domestic scrap prices in the US, prices for prime grades also dropped, but supply remains tight and trades were largely halted. 



Most large-scale mills in Pakistan hiked rebars prices again this week amid stable demand and continued healthy sales. The weekly Davis Indexes for rebar G-60 jumped to PKR167,750/mt ex-works Karachi and PKR166,000/mt ex-works Punjab, up by PKR3,250/mt and PKR2,500/mt, respectively, from July 30. Local rebar offers above PKR155,000-156,000/mt ex-works Lahore. The cement and steel industries are benefited from the government’s initiative to develop the housing sector and promote homeownership. However, end-users are struggling amid high prices. 



The weekly index for domestic Bala billet jumped by rose PKR750/mt ($5/mt) to PKR138,250/mt ($843/mt) ex-works. The weekly Davis Index for G-60 billet at PKR146,250/mt ex-works Punjab, up PKR250/mt from the prior Friday.


The Fede­ral Board of Revenue (FBR) on Wednesday notified fixed values of steel products for assessment of sales tax. The value of steel bars and other long profiles is fixed at PKR140,000/mt, steel billets at PKR125,000/mt, steel ingots/Bala, ship plates at PKR120,000/mt and other re-rollable iron and steel scrap at PKR118,000/mt. These minimum sales price values have been fixed to avoid under-invoicing. This move could benefit all steel producers in the country and prices could stay boosted. 


Domestic scrap

The weekly index for Art Q toke scrap (equivalent to a mix of HMS and P&S) rose by PKR5,000/mt to PKR106,500/mt ex-yard Lahore and Pure Q toke scrap (equivalent to shredded) rose by PKR5,000/mt to PKR108,500/mt ex-yard Lahore.



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