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

Pakistani mills bought limited volumes of imported ferrous scrap at lower prices this week. Active rebar sales ahead of peak construction demand season in the next two months is expected to increase trades as mills with limited inventories restock ferrous scrap in the coming days. Anticipating higher demand, traders are likely to take positions for March shipments next week.


Opinions on the price direction were mixed with some believing prices have bottomed out and could rebound in Turkey as mills resume booking for March and April shipments.


The daily Davis Index for containerized shredded, Friday, inched down by $0.63/mt to $401.25/mt cfr Port Qasim. Prices fell $22.5/mt from the prior week. In recent trades, a total of over 5,000mt shredded scrap in containers traded between $395/mt to $403/mt cfr Qasim. Sellers were unwilling to match lower bids amid tight supply, re-lockdowns, elevated processing cost for shredded, and high freight rates.  


In the US domestic market, February settlements kicked off with prices dropping $50-60/gt for HMS and obsolete scrap. The daily index for US-origin HMS 1&2 (80:20) settled at $375.36/mt cfr Port Qasim, down $0.35/mt. Drop-in containerized prices in the US fas market pulled bids further down in the South Asian markets.  


Offers for #1 HMS and P&S from UAE were at $375-385/mt cfr Port Qasim, depending on quality. The daily Davis Index for UAE-origin HMS 1&2 (80:20), Friday, dropped by $16/mt to $369/mt cfr Port Qasim. Some UAE sellers refused to lower offers and are willing to wait for prices to rebound by atleast $15-20/mt, while those facing cash crunch have already sold materials at lower levels early this week.  


The weekly Davis Indexes for P&S 5ft and #1 busheling settled at $415/mt and $445/mt cfr Port Qasim, respectively, down $26/mt and $23/mt. The US settlements for the February month showed Busheling prices flat against a drop in HMS and shredded. The gap between premium grades vs medium grades is expected to widen in the coming days. Offers for #1 busheling at $430-450/mt cfr Port Qasim but buyers refused to accept.  


Rebar prices drop, trades up  

Domestic steel prices and sales are under pressure with buyers reluctant to book material. The Davis Index for G-60 billet settled at PKR105,500/mt ex-works Punjab, down PKR500/mt from Feb 5. In Lahore, G-60 billet traded at PKR104,000-105,000/mt ex-works. The weekly index for domestic Bala billet dropped by PKR2,000/mt to PKR96,000/mt ($599/mt) ex-works.  


With the global ferrous scrap market showing signs of bottoming, large mills might hold their rebar and billet prices ahead of peak housing construction season.


Demand for rebar remained strong despite weak sales of other steel products. The weekly Davis Index for rebar dropped by PKR3,000/mt to PKR129,500/mt ex-works Karachi, while in Punjab, the index decreased PKR500/mt to PKR126,000/mt ex-works with trades at PKR125,000/mt. Local rebar traded at PKR108,000-112,000/mt ex-works depending on delivery terms.


Domestic scrap plunge  

The weekly index for Art Pure Q toke scrap equivalent to a mix of HMS and P&S Friday decreased by PKR2,750/mt ($17/mt) to PKR77,250/mt ex-yard Lahore. The weekly index for Pure Q Toke (shredded) increased by PKR2,250/mt to PKR79,000/mt ex-yards amid drop in imported scrap prices and bearish sales. Re-rollers could manage their margins as rebar prices did not drop as much as those recorded for billet and other structural steel, these mills shifted focus to rebar production over billet this week. 



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