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

Imported ferrous scrap prices in Pakistan stabilized and showed a marginal recovery from the prior week. Leading suppliers are holding material ahead of a potential freight hike by shipping lines. 


Domestic steel and scrap prices continue their uptrend despite slow demand due to local currency depreciation. Sentiments for imported raw materials turned shaky as the Pakistani rupee slipped below its 11-month low this week to hit PKR167.19 on Friday against the US dollar. Last Friday, it was at PKR166.5. 


Towards the end of the week, a couple of deals were reported at slightly higher prices. But market participants believe these trades are insufficient to confirm a rebound in prices. 


The daily Davis Index for containerized shredded, Friday, rose by $1/mt to settle at $524/mt cfr Qasim and the index gained $4/mt from prior Friday. After a few early-week deals at $520/mt cfr Qasim, on Friday some deals were confirmed in the range of $525-528/mt, cfr Qasim. As domestic steel prices strengthened, sellers were hopeful that Pakistani mills will accept higher prices. Offers were firm on Friday anticipating another round of freight hikes.


In Turkey, the daily Davis Index for bulk imports of US-origin HMS 1&2 (80:20) was at $445.75/mt cfr Turkey Thursday, down $5/mt from the prior week. A Venezuelan supplier is heard to have sold HMS 1&2 (80:20) at $444/mt cfr for October shipment while most mills eyeing below $445/mt cfr. 


The daily Davis Index for UAE-origin HMS 1&2 (80:20) is unchanged at $485/mt cfr port Qasim. The index dropped by $5/mt from Aug 27. Trades for UAE-origin mixed #1 HMS and P&S were reported at $500-505/mt cfr Port Qasim. 


The daily index for US-origin HMS 1&2 (80:20) settled flat at $485/mt cfr Port Qasim on Friday and was lower by $2.5/mt from Aug 27. A decline of $50/gt in prime grades for the US domestic September trades, weighed down fob prices but higher freight rates keep cfr prices elevated.   


The Davis Index for P&S 5ft inched up by $2/mt from the previous Friday to settle at $527/mt cfr Qasim while the index for #1 busheling rose by $4/mt to $542/mt cfr Port Qasim. Trades for high grades remained scarce as most buyers withdrew citing high offers. 



Lower sales volumes pressured local rebar prices despite a hike in branded rebar’s asking prices. Commercial rebar traded at PKR158,000-159,000/mt ex-works amid weak construction demand. 


The weekly Davis Index for rebar settled at PKR177,500/mt ($1,061/mt) ex-works Karachi, up PKR5,500/mt on Friday and the index rose for Punjab rose by the same level to PKR175,500/mt ex-works from Aug 27. Trades for rebar slowed after prices increased. 


Association of Builders and Developers of Pakistan (ABAD) urged the government to initiate strict action against high steel and cement prices. They claim the continued increase in raw material prices could negatively impact the construction industry and slow down the Naya Pakistan Housing Scheme.



The weekly index for domestic Bala billet, Friday, settled unchanged at PKR140,500/mt ($840.5/mt) ex-works on Friday contrary to the market’s expectation that currency depreciation will push prices higher. The weekly Davis Index for G-60 billet rose to PKR148,500/mt ex-works Punjab up PKR500/mt. A few early-week trades for CC billet were reported at PKR142,000/mt ex-works at the higher end. 


Domestic scrap

The weekly index for Art Q toke scrap (equivalent to a mix of HMS and P&S) increased by PKR500/mt to PKR109,500/mt ex-yards while Pure Q toke scrap (equivalent to shredded) rose by PKR250/mt to PKR111,500/mt ex-yard Lahore, respectively, amid tight supply.


Demolition activities in the Gadani were slow. After a sharp rise in scrapped vessel offers above $600/ldt, recyclers are waiting for a decline of at least $20-25/ldt to resume trades to average out their buying prices.



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