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

Pakistani ferrous scrap importers continued to lower bids resulting in a few panic sales at low levels. The increased resistance from South Asian buyers have pressurized sellers and could bring down prices in the coming days. Also, a downtrend in Turkish and Japanese market have slowed trades. 


In Turkey, a couple of small volume cargoes from Baltic-origins sold at lower-than-expected prices. The index for HMS 1&2 (80:20), Thursday, fell by $3.88/mt to $447/mt cfr Turkey. The next round of negotiation for US-origins expected to be around $440/mt cfr Turkey. Following the drop in Turkish prices, major mills in Pakistan decided to either postpone trades or lower bids sharply amid lacklustre steel demand in the country.


The Davis Index for containerized shredded, Friday, settled at $431.25/mt cfr Port Qasim, down by $11.25/mt from Thursday. Amid a few distressed sales in thin volumes reported at $430-435/mt cfr Qasim on Friday, the index tumbled by $32.38/mt from the prior week.


Traders, who have material loaded or on high seas, are pressured by the lack of interest shown by mills. Yet, most yards in the UK/EU and large traders are offering new bookings only above $435-445/mt cfr Port Qasim, said sources to Davis Index.  


Industry participants feel that steel demand is expected to turn active next week as buyers would resume pre-Ramadan restocking. Traditionally, trading and other activities slow down due to limited operating hours during the holy month of Ramadan, which starts from April 12.


The daily index for US-origin HMS 1&2 (80:20), Friday, settled at $422.5/mt cfr Port Qasim, down $7.5/mt. Prices dropped by $12.5/mt from a week prior. A sharp drop in fas basis offers from the US suppliers dampened sentiments further.


Offers for #1 HMS and P&S from UAE dropped by $5/mt to $415-420/mt cfr Port Qasim, depending on quality. The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled at $408/mt cfr Port Qasim, down by $5/mt amid a sharp drop in bids.  


The daily Davis Indexes for P&S 5ft and #1 busheling settled at $442/mt and $457/mt cfr Port Qasim, respectively, down $33/mt from the prior week. Only a few buyers were willing to negotiate for premium grades amid a widening gap between premium and obsolete scrap in the US domestic settlements for March.  


Billet and rebar inch up  

On Friday, Bala traded at PKR105,500-106,000/mt ex-works. On weekly comparison, the index for domestic Bala billet rose by PKR750/mt to PKR106,250/mt ($676/mt) ex-works.


The Davis Index for G-60 billet settled at PKR113,000/mt, up PKR500/mt ex-works Punjab. Demand is expected to pick up gradually ahead of Ramadan before the market drops again in April. The weekly Davis Index for rebar rose by PKR500/mt to PKR135,500/mt ex-works Karachi, while in Punjab, the index increased by PKR250/mt to PKR131,500/mt ex-works.  


Domestic steel demand has been stagnant for over a month. The availability of lower-priced steel in the Punjab market has kept prices from rising. Leading producers raised HRC prices by PKR3,000-3,500/mt following high imported offers.


Domestic scrap rises 

As supply remains tight, the weekly index for Art Q toke scrap equivalent to a mix of HMS and P&S, Friday, settled higher by PKR2,500/mt ($15/mt) to PKR87,250/mt ex-yard Lahore. Offers for Pure Q toke scrap equivalent to shredded were at PKR88,000-88,500/mt ex-yard Lahore. The weekly index for the grade settled at PKR88,250/mt ex-yards, up PKR2,000/mt.


In Gadani, yards are busy with cutting activities. Offers for scrapped vessels ranged at $450-460/ldt cnf, marginally down from the prior week.  



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