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

Importers from Pakistan are anticipating demand to pick up next week. Mills, finally, raised rebar prices by PKR2,000-2,500/mt ($12.4-15.6/mt) on Friday to offset higher ferrous scrap prices. In November, imported scrap prices have trended up by $35/mt in line with global cues.   


Supply tightness amid the resurgence of COVID-19 in most supplier countries has also supported higher scrap prices. A possibility of domestic scrap prices increasing by $20-40/gt in the US in December also kept suppliers bullish.


The Davis Index for containerized shredded, Friday, gained by $2.39/mt to settle at $361.43/mt cfr Port Qasim. The index rose by $21.72/mt from November 12. Shredded prices jumped amid few trades for containerized EU and UK-origin shredded at $358-362/mt cfr Port Qasim. Most US suppliers refused to place fresh offers due to depleting stocks. Yards are expecting lowered collections rates as winter approaches. A few shredded offers were at $365/mt cfr Port Qasim on Friday, almost hitting a two-year high, up by $22/mt from the prior week.  


The Davis Index for UAE-origin HMS 1&2 (80:20) settled Friday at $344/mt cfr Port Qasim, up by $2/mt from Thursday and up $16/mt from a week earlier. Mills preferred shredded over HMS scrap to avoid paying extra taxes imposed on the imports of the latter. Trades for containerized Dubai-origin mixed #1 HMS and P&S sarya scrap were in the range of $345-350/mt cfr Port Qasim.  


The index for US-origin HMS 1&2 (80:20), Friday, settled at $342.5/mt cfr Port Qasim, up by $17/mt from Nov 12. Most European supplier countries are under lockdown amid the rising tally of COVID-19 infections. Containerized offers for the grade from the US and UK were limited in anticipation of a bullish December market.  


In Pakistan, although mega infrastructure projects have resumed, the pace of work is slow and rebar demand has remained flat for over a month-and-half. But few steelmakers have announced price hikes for rebar. This could encourage importers to pay more for scrap in the next few days. Yards might hold back inventory to sell materials aggressively in early December, said importers, which could slow the pace of price gains in the latter half of November. Imported scrap prices moved up by $20-25 in the first half of November.  


Offers from South American suppliers for HMS 1&2 (80:20) were at $335/mt cfr Qasim. The weekly Davis Indexes for P&S and #1 busheling settled at $360/mt and $370/mt cfr Port Qasim, up by $20/mt and $15/mt, respectively. Trades for premium grades scrap were very limited on the non-availability of offers. Cast iron rotor drums from the US were offered at $370/mt cfr Qasim.  


Also, the Pakistani currency depreciated to PKR160.5 against the US dollar after reaching the 158 mark last week, limiting imports this week.    


Rebar prices jump on high scrap

In the domestic market, Bala billet prices were at PKR92,500-92,700/mt ($575-578/mt) ex-works Punjab, pushing the index up by PKR1,000/mt from a week ago. The Davis Index for G-60 billet settled at PKR96,750/mt ex-works Punjab, up PKR750/mt from Nov 12.  


The weekly Davis Index for G-60 rebar rose by PKR2,000/mt to PKR111,500/mt ex-works Karachi. In Punjab, G-60 rebar prices were at PKR109,500-110,000/mt ex-works, up PKR2,000/mt from the prior week. All mills canceled discounts on finished steel amid a cash crunch. 


Domestic scrap

In the northern region, the local government has imposed restrictions on some secondary rolling mills and furnaces, especially those without smog or carbon emission control machinery. The index for Art Q toke scrap equivalent to mix HMS and P&S jumped by PKR1,500/mt to PKR70,500/mt ex-works Lahore, Friday, from late last week. The weekly index for Pure Q Toke (shredded) too rose to PKR71,500/mt ex-works in line with higher imported scrap prices.  




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