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

Pakistani imported ferrous scrap offers remained firm but trades were slow amid limited supply and non-availability of containers. Major trades were suspended as the holy month of Ramadan will start from April 13 and new restrictions have been put in place due to the resurgence of COVID-19 infections.


Usually, activities peak after Eid and before the Union Budget announcement in June. A few mills restocked ferrous scrap in hopes of another round of infrastructure push and cash infusion through the fiscal budget.


The Davis Index for containerized shredded, Friday, settled at $465/mt cfr Port Qasim up $0.36/mt from Thursday. The index rose by $7.5/mt over the week. Mills booked limited volumes of shredded in the range of $460-465/mt cfr port Qasim, prompting most UK and EU-based suppliers to keep offers firm at $465-470/mt cfr port Qasim. Despite increasing supplies at yards, a hike in container freight rates increased the landed cost of scrap. 


In Turkey, mills continued May and June shipment bookings paying $6-7/mt more than the prior week. Resumption in bulk trades pushed offers up in South Asia both for containers and bulk. Prices of US-origin HMS 1&2 (80:20) rose to $433/mt cfr Turkey with the expectation of reaching $440/mt before Ramadan. 


The daily index for US-origin HMS 1&2 (80:20), Friday, remained unchanged at $437.50/mt cfr Port Qasim. The index rose $10/mt from the prior week. Offers were at $440-445/mt cfr Qasim as mills were inclined to purchase UAE-origin HMS on a short delivery period. Stable domestic demand in the US and European markets reduced export offers to South Asia. 


Offers for mixed #1 HMS and P&S from UAE heard at $450-460/mt cfr Port Qasim, up $10/mt from the prior week depending on quality. The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled at $443/mt cfr Port Qasim, stable from Thursday. A few trades heard at $440-445/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 $477/mt and $495/mt cfr Port Qasim, up $12/mt and $8/mt, respectively, from the prior Friday. Scaling back of auto production due to a shortage of semiconductors could impact the generation of prime grade scrap.


Domestic scrap prices unchanged

On stable demand, the weekly index for Art Q toke scrap equivalent to a mix of HMS and P&S, Friday, settled unchanged at 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 PKR88,750/mt ex-yards, down PKR250/mt. Limited availability of imported scrap offers amid shipping line issues are driving domestic scrap trades in Pakistan.


In Gadani, demolition work slowed after intense activity during the past 10 days. Ship melting scrap traded above PKR90,500-91,000/mt ex-yards amid tight supply. Recyclers resisted scrapped vessels or container carrier deals above $480-490/mt cnf Gadani. 


HRC producers have hiked prices by PKR2,500-3,000/mt for April shipments amid strong international prices and bullish auto demand. 


Weak demand impacts domestic steel

On Friday, Bala billets traded at PKR107,500-108,000/mt ex-works Lahore, down by PKR500/mt from the prior week. On a weekly basis, the index for domestic Bala billet dropped PKR500/mt to PKR107,500/mt ($703/mt) ex-works. Offers for G-60 billet heard at PKR112,500-113,000/mt ex-works Punjab. The Davis Index for G-60 billet settled at PKR112,750/mt, down PKR1,000/mt ex-works Punjab. 


Long steelmakers in Punjab and Karachi kept offers firm on increased input cost, despite weak demand. Trades for rebar remained comparatively slow at higher prices. Domestic steel prices could see a gradual improvement amid an appreciation of the Pakistani rupee, and increased cash flows from the government could accelerate infra projects.


The weekly Davis Index for rebar dropped PKR500/mt to PKR136,000/mt, ex-works Karachi, while in Punjab, the index decreased by PKR500/mt to PKR131,750/mt ex-works. Local rebar offers dropped by PKR1,000/mt to PKR120,000-121,000/mt ex-works Punjab.



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