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

Imported ferrous scrap bookings in Pakistan, this week, slowed as finished steel demand remains subdued. Mills are resorting to a just-in-time strategy to manage their inventories. There were very limited offers for shredded grade amid heavy supply crunch, thus a few mills increased trades for higher grades scrap such as Busheling and P&S.


The Davis Index for containerized shredded, Friday, gained $2.49/mt from Thursday and $16.25/mt from Nov 27 to settle at $386.07/mt cfr Port Qasim. A few trades for containerized EU and UK-origin shredded heard at $383-386/mt cfr Port Qasim against early week levels of $380-382/mt cfr Qasim. Major mills resisted paying higher due to weak steel sales. A few traders indicated $390-395/mt cfr Qasim levels for the next week.


The Davis Index for UAE-origin HMS 1&2 (80:20) settled, Friday, at $368/mt cfr Port Qasim, up by $1/mt from Thursday and by $9/mt from a week ago. Mills preferred shredded over HMS scrap to avoid paying extra taxes imposed on the imports of the latter. Trades from Dubai thinned amid active Indian demand, but most traders held their material to make the best of the bull run. Indications for containerized Dubai-origin mixed #1 HMS and P&S sarya scrap were around $375/mt cfr Port Qasim.  


The index for US-origin HMS 1&2 (80:20), Friday, settled at $368.75/mt cfr Port Qasim, up $14.11/mt from Nov 27. Most European suppliers were in the mood to shut yards or cut operating hours ahead of schedule holidays due to renewed lockdown amid rising COVID-19 infections.  


The weekly Davis Indexes for P&S and #1 busheling settled at $390/mt and $400/mt cfr Port Qasim, up by $18/mt and $10/mt, respectively. Inquiries for other premium grades of scrap resumed this week to offset the shortage of shredded. Cast iron, rotor, and drums from the US were offered at $390-395/mt cfr Pakistan, higher by $10-15/mt from the prior week.  


In the absence of South African suppliers, subcontinental buyers are competing to secure material from Australia, New Zealand, and South America sellers; with Bangladeshi buyers placing the highest bids.    


Rebar prices high, trades slow

In the domestic market, steel prices rose incrementally each day by PKR200-300/mt this week. Bala billet prices were at PKR94,500-95,000/mt ($590-594/mt) ex-works Punjab, with index settling higher by PKR1,500/mt from a week ago. The Davis Index for G-60 billet settled at PKR99,000/mt ex-works Punjab, up PKR1,250/mt from Nov 27. Rebar makers too decided to pass on the increase in input costs to end-users. Finished steel prices rose in Pakistan gaining support from economic packages of PKR1 trillion and PKR100bn announced in Punjab and Khyber Pakhtunkhwa, respectively, for housing and construction projects.  


Trades for rebar started recovering in the Southern region and were at PKR114,500-115,000/mt ex-works Karachi. In Punjab, G-60 rebar prices were at PKR113,000-113,500/mt ex-works. Prices rose by PKR2,500-3,000/mt from mid-November. Most mills cancelled discounts on finished steel and are eyeing a price hike.


The weekly Davis Index for G-60 rebar rose PKR2,250/mt to PKR115,000/mt ex-works Karachi. In Punjab, G-60 rebar prices were at PKR113,500-114,000/mt ex-works, up by at least PKR2,000/mt from a week ago. 


Domestic scrap

Despite rising prices, demand remains unsupportive of 100pc capacity utilization and continuous production by mills. During winters, many mills could cut production.  


The index for Art Q toke scrap equivalent to a mix of HMS and P&S jumped by PKR1250/mt to PKR72,500/mt ex-yard Lahore, Friday, from late last week. The weekly index for Pure Q Toke (shredded) too rose PKR1,250/mt to PKR74,000/mt, ex-yards in line with rising imported scrap prices.  


Domestic ferrous scrap prices in Pakistan rose on bullish global cues. Pakistan ship recyclers remained active buying scrapped tankers at upto $380/ldt cfr Pakistan this week.  



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