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

Pakistani ferrous scrap prices jumped by $20-25/mt from last week amid active trading. Steelmakers sought to restock inventories ahead of Ramadan. A rise in domestic scrap prices and appreciation of the Pakistani rupee against the US dollar also boosted appetite for imported scrap.


The Davis Index for containerized shredded, Friday, settled at $457.5/mt cfr Port Qasim up $10/mt from Thursday. Mills bought shredded at $455-460/mt cfr Qasim on Thursday and Friday, pushing the index up by $24.29/mt from the prior week. While suppliers in the UK and EU targeted $460-465/mt cfr Qasim. Also, despite increasing supplies at yards, a hike in container freight rates increased the landed cost of scrap.  


A resurgence of COVID-19 overshadowed increased construction activities at government projects and improvements in cash flows. Many shipping lines have hiked freight rates by $100-200/mt, effective April 1, increasing the landed cost for importers. There is also a possibility of additional rounds of price hikes in the coming days due to the shortage of containers caused by a dip in Chinese exports.  


The daily index for US-origin HMS 1&2 (80:20), Friday, settled at $427.5/mt cfr Port Qasim, up $7.5/mt from Thursday and $15/mt from last Friday. Very few major deals heard amid healthy domestic markets.  


Offers for mixed #1 HMS and P&S  from UAE heard at $440-450/mt cfr Port Qasim depending on quality. The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled at $436/mt cfr Port Qasim, up by $10/mt. The index jumped $25/mt from the prior Friday. A few trades heard at $430-435/mt cfr Port Qasim. There is a shortage of materials due to active domestic demand in the UAE.


The Davis Indexes for P&S 5ft and #1 busheling settled at $465/mt and $488/mt cfr Port Qasim, up $20/mt from the prior Friday. Sellers are struggling with the non-availability of containers and margin squeeze due to higher freight rates. Scaling back of auto production due to a shortage of semiconductors could impact generations of prime grade scrap.


High scrap prices lift rebar asking rates  

On Friday, Bala billets traded at PKR108,000-108,500/mt ex-works Lahore, up by PKR500/mt from Thursday. On a weekly basis, the index for domestic Bala billet rose PKR1,750/mt to PKR108,000/mt ($703/mt) ex-works.  


Offers for G-60 billet heard at PKR113,500-114,000/mt ex-works Punjab. The Davis Index for G-60 billet settled at PKR113,750/mt, up PKR3,000/mt ex-works Punjab.  


On April 1, a Punjab-based steel mill announced a price hike of PKR2,000/mt on increased imported scrap prices. The weekly Davis Index for rebar rose PKR1,250/mt to PKR136,250/mt, ex-works Karachi, while in Punjab, the index increased by PKR1,750/mt to PKR132,250/mt ex-works. Local rebar offers at PKR121,000-122,000/mt ex-works Punjab.


Domestic steel demand has shown signs of recovery as most infrastructure projects received cash release from the government and are expected to turn active soon. Still, many furnaces in are Punjab facing financial challenges and could either shut operations or cut production by 50pc. 


Domestic scrap in active demand 

On rising demand, the weekly index for Art Q toke scrap equivalent to a mix of HMS and P&S, Friday, settled up by PKR1,000/mt ($6/mt) to PKR87,500/mt ex-yard Lahore.  


Trades for Pure Q toke scrap equivalent to shredded were at PKR88,500-89,000/mt ex-yard Lahore. The weekly index for the grade settled at PKR89,000/mt ex-yards, up PKR500/mt. Limited availability of imported scrap offers amid shipping line issues are driving domestic scrap trades in Pakistan.


In Gadani, offers for scrapped vessels were unchanged on bullish global cues and active plate demand. Offers ranged from $470-490/ldt cnf. Ship melting scrap traded above PKR90,500-91,000/mt ex-yards amid tight supply.



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