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

Pakistani mills returned to book imported ferrous scrap after a new round of rebar price hikes in the local market on Tuesday. Unable to maintain the spread between scrap and rebar, buyers had to pause imported scrap bookings in the last couple of days. Many steelmakers were struggling to make profits on weak domestic demand, high ferrous scrap prices and liquidity crunch. Approaching month-end shifted their focus to paying-off electricity and utility bills.


Offers continued to rise as anticipated by traders. Mills are likely to accept higher offers to stock inventories ahead of Ramadan in April, while a few buyers could opt to wait for further clarity on price direction. Few major mills in Karachi have ample inventories to meet near term demand.


The daily Davis Index for containerized shredded, Wednesday, inched up by $0.83/mt to $460.83/mt cfr Port Qasim. On expectations of fetching better prices for shredded in Pakistan, most traders held their offers at $465-470/mt cfr Qasim.


Rebar prices rose to offset the recent 10pc power tariff hike levied on the energy-intensive steel industry. To pass-on high input costs including the rise in imported shredded prices, mills could again raise prices by PKR5,000/mt in the coming days.


Offers for rebar rose by PKR3,000-4,000/mt from Friday to PKR132,000-133,000/mt ex-works Karachi, while in Punjab rebar traded at around PKR129,000-130,000/mt ex-works. Rebar prices could reach PKR150,000/mt ex-works amid peak demand from the construction sector in the near term.


In Turkey, the daily index for HMS 1&2 (80:20) jumped by $9.96/mt to settle at $444.8/mt cfr Turkey on Tuesday. Amid rising rebar prices and orders, Turkish mills resumed bulk purchases for April shipments. Offers could soon reach $450-455/mt cfr Turkey, said traders.


The index for US-origin HMS 1&2 (80:20) settled at $424.64/mt cfr Port Qasim, up by $0.89/mt from Tuesday amid a bullish domestic outlook for March. A few exporters offered containerized HMS 1&2 (80:20) at $425-430/mt cfr Port Qasim but buyer interest was limited due to long transit periods.


Following the global trend, offers for #1 HMS and P&S from UAE rose to $440-445/mt cfr Port Qasim depending on quality. The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled flat at $425/mt cfr Port Qasim on Wednesday. Mills opted for Dubai-origin HMS 1&2 (80:20) over high-priced shredded offers.


High scrap prices support billet

On Wednesday, billet prices remained at PKR101,500-102,000/mt ex-works. Offers for Art Pure Q toke scrap equivalent to a mix of HMS and P&S Wednesday were flat despite weak demand on high imported scrap prices. Prices for the grade at PKR80,300-80,500/mt ex-yard Lahore. Trades for the Pure Q Toke equivalent to shredded reported at PKR81,500-82,000/mt ex-yards stable from Tuesday.



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