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

Pakistani ferrous scrap prices dropped for the second week. In two weeks, prices have declined by a total of $15-20/mt. Bookings declined as suppliers have started resisting present bid levels amid tight supply. Though few trades were reported, most major mills stayed away from purchases as domestic steel demand continued to lag. 

In October, however, mills could book aggressively with expectations of demand recovery for long and flat steel in the construction and automotive sectors. 


The Davis Index for containerized shredded, Friday, settled at $308.86/mt cfr Port Qasim down by $1.23/mt from Thursday and by $9/mt from the prior Friday. UK-origin shredded traded at $309-310/mt cfr Port Qasim. Some mills were bidding for European scrap at $305-307/mt cfr Port Qasim on Friday. A wide disparity between bids and offers resulted in a silent market.  

Shredded prices were earlier anticipated to fall to $300/mt cfr Port Qasim since the bulk market was silent for almost 10 days in Turkey. But with Turkish mills resuming bookings for October-November shipments, a steep decline in the containers market also seems unlikely. Especially since suppliers have revoked earlier offers intending to increase their expectations citing supply crunch.

The possibility of trades of finished flat steel at prices lower than the present market flooding the market, especially HRC from China at $520/mt cfr Port Qasim has dampened market sentiment and buyers stayed away from bookings to limit their risks. Improving demand from the auto industry made importers restock HRC from China at lower prices. Trades for Chinese HRC were at $515-520/mt cfr Port Qasim. 


Agha Steel plans to move forward with an initial public offering (IPO) in October to raise about PKR5bn ($30.08mn) and expand its steelmaking capacity. 


The Davis Index for UAE-origin HMS 1&2 (80:20) settled at $294/mt cfr Port Qasim, down $1/mt from Thursday and by $6/mt from a week ago. Buyers lowered bids for HMS scrap to $290-293/mt cfr Port Qasim. Trades for UAE-origin mixed #1 HMS and P&S sarya scrap were reported at $300/mt cfr Port Qasim. GI scrap bundles traded at $310-315/mt cfr Port Qasim. Suppliers expect domestic scrap demand in UAE to improve due to rising construction steel prices. They offered lower volumes as they seek clarity on the extension of the ferrous scrap export ban. 


The index for US-origin HMS 1&2 (80:20) settled at $294/mt cfr Port Qasim, down by $1.86/mt from Thursday. Most US yards were unwilling to offer large volumes citing a stronger market in October. Offers were at $300/mt cfr Port Qasim against mills’ bids of $290/mt cfr Port Qasim.


The weekly Davis Index for HMS 1&2 (80:20) from the UK/Europe settled at $295/mt cfr Port Qasim, down by $6/mt. With most buyers bidding at prices $10/mt below the offer levels, some UK yards were forced to ease offers. Trades were limited.  

The index for Latin American HMS 1&2 (80:20) settled at $287/mt cfr Port Qasim, down by $9/mt from the prior week. Brazilian traders stayed away from doling fresh offers as their domestic market gained strength. A few trades for LMS of Caribbean-origin were at $265-270/mt cfr Port Qasim. 

The weekly Davis Indexes for P&S and busheling settled at $318/mt and $334/mt cfr Port Qasim, down by $5/mt and $1/mt, respectively. Most traders stayed away from deals of heavy grade scrap. Bids for P&S scrap dropped to $315/mt cfr Port Qasim following the decline in prices for shredded from Brazil and UAE.  


Domestic steel 

Domestic steel prices were rangebound amid weak demand. Hopes of demand recovery driven by infra projects initiated by the government in North Pakistan could lift trades next week. The weekly Davis Index for commercial Bala billet, Friday, settled at PKR91,250/mt ($554/mt) ex-works Punjab inclusive of local taxes, down PKR250/mt from the prior week. 

Trades concluded at PKR91,000-91,500/mt ex-works over this week. The Davis Index for G-60 billet settled at PKR96,500/mt ex-works Punjab, unchanged from the prior week. 

The weekly Davis Index for G-60 rebar settled flat at PKR109,000/mt ($659/mt) ex-works Karachi, up by PKR500/mt. Rebar traded at the index price against offers of PKR110,000/mt ex-works Karachi this week. In Punjab, G-60 rebar prices were PKR109,5000/mt ex-works, declining by PKR500/mt amid subdued demand.

Finished steel prices in Southern Pakistan were under pressure as leading steelmakers offered discounts to liquidate inventories. Rains in the Southern region kept trades limited. In Gadani’s shipbreaking market, scrapped containers and tankers were offered at $350-360/ldt, unchanged from the prior week.


Domestic scrap

A downtrend in imported scrap prices also pulled down domestic scrap prices. Pure Q toke scrap equivalent to shredded traded at PKR70,500/mt ex-yard Lahore, Friday, down by PKR250/mt from early this week. The weekly index for Pure Q Toke (shredded) fell by PKR318/mt to PKR71,000/mt ex-Pakistan yard on Friday. 




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