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

Pakistani steel mills increased inquiries for imported ferrous scrap as inventories with most have already depleted. Manufacturers and contractors are hopeful about steel rising after Eid. Though the government has tightened restrictions to control the spread of the COVID-19 virus, production and transportation activities remain unaffected. 


The daily Davis Index for containerized shredded, Monday, settled at $460.86/mt cfr Port Qasim, up by $0.61/mt from Friday. Positive sentiment in the market lifted prices after deals for shredded totaling 10,000mt were heard last week at $455-460/mt cfr Qasim. Earlier booked and loaded material has either arrived or in transit. 


Offers for shredded rose to $462-465/mt cfr Qasim. But amid a limited number of fresh offers, buyers are likely to accept these price levels in the coming days. 

UK/EU suppliers refused to sell at present bids levels of $455-457/mt cfr Qasim due to increased containerized freight charges and weakness in their currencies British Pound and Euro. In their domestic markets, steel prices also continued to rise as ArcelorMittal announced another round of price hike, taking HRC above EUR1,000/mt ex-works. 


In Turkey, the ongoing Ramadan lull kept mills away from bulk purchases, and prices were rangebound at $425-427/mt cfr Turkey for bulk US-origin HMS 1&2 (80:20).

The daily index for US-origin HMS 1&2 (80:20), Monday, rose $1.25/mt to $441.25/mt cfr Port Qasim. Offers were at $440-450/mt cfr Qasim depending on quality. Freight rates on the US route declined slightly, but the non-availability of containers continued to impact trade. Most mills were inclined to purchase UAE-origin HMS since it has a shorter transit period. 


The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled at $443/mt cfr Port Qasim, up by $1/mt from Friday. Offers for mixed #1 HMS and P&S from UAE rose by $5/mt from Friday to $455-460/mt cfr Port Qasim, depending on quality. Limited operation and transportation hours, along with annual maintenance activities and increased power consumption has impacted supplies.


Steel demand on the mend 

In the domestic market, Bala billet was offered at PKR109,500-110,000/mt ex-works Lahore, up by PKR300-500/mt from Friday. Offers for G-60 billet were unchanged at PKR113,000-113,500/mt ex-works Punjab from Friday. 

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. 


Offers for rebar remained above PKR135,000-136,000/mt, ex-works Karachi, while in Punjab, it traded at around PKR131,000-132,000/mt ex-works. Local rebar sold at PKR120,000-121,000/mt ex-works Punjab. With improvement in demand, most steelmakers are likely to attempt another round of price hike in the coming days.

In Pakistan, HRC prices are expected to move up in the coming days on bullish global sentiment. Steel futures in China have moved up after the announcement of additional production curbs. 

Furthermore, China has also resumed billet imports, which is expected to keep steel prices in Asian countries firm.

Domestic scrap firm 

Driven by a rise in imported scrap offers, domestic scrap Art Q toke equivalent to a mix of HMS and P&S, Monday, traded at PKR89,500-89,800/mt ex-yard Lahore, up PKR200/mt. Deals for Pure Q toke scrap equivalent to shredded rose to PKR90,700-91,000/mt ex-yard Lahore. 





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