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

Trades for imported ferrous scrap resumed in Pakistan as prices fell by $70-80/mt in less than a week. Many supplier yards showed resistance to offer large volumes anticipating a rebound. On the other hand, tumbling domestic steel prices discouraged some mills from booking imported scrap even as offers dropped.


The daily Davis Index for containerized shredded, Thursday, settled at $433.82/mt cfr Port Qasim, down $11.18/mt from Wednesday. Mills both in the South and North regions turned active to restock at lowered prices. Deals for over 10,000-15,000mt shredded from the EU/UK-origin heard at $435/mt cfr Qasim. On Thursday, a few traders also sold shredded at $430/mt cfr Qasim. 


Market participants believe Chinese buyers could resume imports of higher grades offering support to falling prices, while demand for Turkish rebar in SE Asian markets remains stable. In Turkey, domestic HRC prices are also stable despite a $40-45/mt drop in bulk ferrous scrap prices since Jan 12. On Wednesday, prices for imported HMS 1&2 (80:20) cargoes fell below $440/mt cfr Turkey with a few mills targeting $420-430/mt cfr Turkey levels in the near term.


The daily index for US-origin HMS 1&2 (80:20) settled at $407.5/mt cfr Port Qasim, down $7.5/mt from Wednesday in the absence of major deals. Scrap prices have turned volatile as many traders are taking short-selling positions at lower levels. However, most yards have refused to offer scrap at lower prices amid container unavailability and limited vessel space. Suppliers believe the market could rebound post-Chinese New Year, said a trader.


Suppliers from the UAE offered #1 HMS and P&S at $400-410/mt cfr Port Qasim depending on quality. The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled at $405/mt cfr Port Qasim down $6/mt from Wednesday. Traders said there is limited room for prices to drop further, however, Indian buyers, who prefer UAE HMS, are not accepting offers above $365-370/mt cfr Nhava Sheva. 


Drop in scrap pressure steel prices 

Pakistani mills offered attractive discounts on steel products to stimulate sales. Domestic Bala billet continues to trend down losing over PKR1,000/mt ($6.22/mt) every day. On Thursday, Bala billet traded at PKR93,000-94,000/mt ex-works Lahore. In Karachi, major rebar producers offered discounts. Mills in the South traded G-60 rebar 12-32mm at PKR132,000-133,000/mt ($821-827/mt) ex-works while trades for local rebar heard at PKR109,000-110,000/mt ex works. 


Domestic scrap stays on a downtrend 

On Thursday, local Art Q toke scrap equivalent to a mix of HMS and P&S offered at PKR74,000-75,000/mt ex-works Lahore, while Pure Q Toke (shredded) traded at PKR78,000-78,500/mt ex-yards, down PKR1,000-1,500/mt from Wednesday. As the gap between G-60 rebar and local rebar increased above the usual of PKR10,000/mt, traders anticipate large mills to cut steel prices in the next few days.

For shipbreakers, demolition vessel offers dropped over $35-40/mt from the prior week in sync with a drop in imported scrap. Yards are waiting for prices to settle to resume bookings.



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