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

Pakistani ferrous scrap importers booked limited volumes amid tight supply. Bids dropped sharply to match steelmakers’ expectations as domestic steel demand continued to lag. Few mills opined scrap offers should correct for them to resume trades. 


The Davis Index for containerized shredded Friday settled at $317.5/mt cfr Port Qasim down $1.31/mt from Thursday and down $10.5/mt from the prior Friday. UK-origin shredded traded at $318-320/mt cfr Qasim while a few distressed sales from Europe reported at $315-317/mt cfr Qasim in thin quantities. The disparity between bids and offers resulted in limited trades. Pakistan’s steel industry is banking heavily on construction activities which are expected to boost demand for finished steel products over the long term. 


The Davis Index for UAE-origin HMS 1&2 (80:20) Friday settled at $300/mt cfr Port Qasim, down $5/mt from Thursday and down $10/mt from the prior week. Trades for UAE-origin mixed #1 HMS and P&S sarya scrap were at $305/mt cfr Port Qasim varying by quality. Offers from South African suppliers were at $300/mt cfr Qasim on Friday. Buyers continued to prefer UAE-origin scrap due to shorter delivery times, a few importers held back trades to gain clarity on the extended ban on the export of scrap from UAE. Suppliers expect domestic scrap demand to improve on rising construction steel prices in the UAE. 


The index for US-origin HMS 1&2 (80:20) dropped sharply to $295.43/mt cfr Port Qasim, down by $13/mt from a week ago. Though supply tightness pushed containerised indexes up in the US. Trades were reported at around $295-300/mt cfr Port Qasim. While a few US yards offered HMS 1&2 (80:20) at $305/mt cfr Port Qasim on Friday refusing lower bids from potential buyers.

The weekly Davis Index for HMS 1&2 (80:20) from the UK and Europe Friday settled at $301/mt cfr Port Qasim, down by $4.83/mt a week ago. A sharp drop in bids forced some UK yards to ease offers, but trades were limited against bids of $295-300/mt cfr Port Qasim on Friday. 


The index for Latin American HMS 1&2 (80:20) settled at $296/mt cfr Port Qasim, down by $7.75/mt from the prior week. Brazilian traders offered no supplies as the domestic market gained strength. A few trades for LMS from Caribbean suppliers sold at $265-270/mt cfr Qasim. 


The Davis Indexes for P&S and busheling settled at $323/mt and $335/mt cfr Port Qasim, down by $2/mt and $3/mt, respectively, from the prior week. Trades for both grades were customized as per mills’ requirements while most traders stayed away from deals on heavy grade scrap. Bids for P&S scrap too dropped to $315-320/mt cfr Qasim in step with shredded prices. 


Pakistan’s imported ferrous scrap trades were limited in the week but a rise in domestic scrap prices on limited supply encouraged traders to book imported scrap in containers. National tariff commission (NTC) has proposed a reduction in tariff on imports of finished and semi-finished steel products. Pakistan Association of Large Steel Producers (PALSP) has opposed this move as it could result in deindustrialization of the country. 


Improving demand from the auto industry resulted in Pakistani importers paying a higher price of $525-535/mt cfr Qasim for HRC imports from China. Mills worried of low-priced Chinese offers flooding local markets in the coming days. 


Domestic steel 

Domestic steel prices remained flat in Pakistan despite hopes of a recovery in demand from infra projects initiated by the government in the North. The weekly Davis Index for commercial Bala billet, Friday, settled at PKR91,500/mt ($554/mt) ex-works Punjab inclusive of local taxes, down PKR500/mt from the prior week. Trades concluded at PKR91,000-92,000/mt ex-works over this week however buyers cut purchase volumes due to liquidity crunch. The Davis Index for G-60 billet settled at PKR96,500/mt ex-works Punjab, with the index declining PKR750/mt from the prior week. 


The weekly Davis Index for G-60 rebar settled flat at PKR108,500/mt ($652.5/mt) ex-works Karachi unchanged from the prior week. Rebar traded at the index price against offers of PKR110,000/mt ex-works Karachi this week. In Punjab, G-60 rebar prices stood PKR110,000/mt ex-works after a sharp drop in the prior week amid subdued demand.


Finished steel prices in Southern Pakistan were under pressure as leading steelmakers offered discounts to liquidate inventories. Gadani’s shipbreaking market was upbeat fuelled by strong global cues. Scrapped containers and tankers were offered at $350-360/ldt, down $10/ldt from the prior week.


Domestic scrap

Imported scrap prices remained under pressure on prolonged weak finished steel demand pulling domestic scrap prices down in Pakistan. Pure Q toke scrap equivalent to shredded traded at PKR70,750/mt ex-works Lahore on Friday, down by PKR250/mt from early this week. The weekly index for Pure Q Toke (shredded) ex-Pakistan yard was at PKR71,333/mt, down PKR292/mt from the prior week on Friday. Trades for the grade were heard at PKR72,000-72,500/mt delivered to mill early this week. 




Leave a Reply

Your email address will not be published.