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

Pakistani mills remained inactive on Tuesday as limited steel demand in the country discouraged imported scrap trades. Few offers for UK/EU-origin shredded heard at $430-435/mt cfr Port Qasim. 


Beside weak steel demand, imported ferrous scrap trade in Pakistan is impacted by shipping lines’ stance to lower free days and levy extra fees for delays in clearing consignments at ports. Rising freight rates and a shortage of containers has also lowered buying interest. Higher scrap prices amid lower sales due to an increase in steel prices are forcing mills in Pakistan to operate at lower margins, making imported scrap an unviable option. 


A surge in Turkish bulk prices has lifted South Asian scrap offers. Global HRC and billet markets too are bullish driven by higher raw materials prices. This trend is expected to extend for two more weeks, as per market participants.  


The daily Davis Index for containerized shredded, Tuesday, rose by $4.72/mt to settle at $430.28/mt cfr Port Qasim. Offers for UK/EU-origin shredded from traders and suppliers at $430-435/mt cfr Port Qasim in very limited numbers. Buying interest was limited but as mills have no option than to accept higher levels trades are expected to materialise at fresh offers. In a single deal for 1,000mt UK-origin shredded concluded at $425/mt cfr Qasim on Tuesday. Suppliers yards kept offers high ahead of Christmas and New Year holidays starting from Dec 20 onwards.


The Davis Index for UAE-origin HMS 1&2 (80:20) settled at $406/mt cfr Port Qasim, up by $1/mt from Monday. Offers for HMS 1&2 (80:20) heard at $405-410/mt cfr Qasim amid an acute shortage of materials. Offers for Dubai-origin containerized mixed #1 HMS and P&S sarya rose above $410-415/mt cfr Port Qasim turning it less-viable for mills to restock. 


The index for US-origin HMS 1&2 (80:20), Tuesday, settled at $408.25/mt cfr Port Qasim, up by $2/mt from Monday. Pakistani mills are buying scrap on just-in-time basis. Harsh winter in many rural regions of the country has halted construction. Large infra projects which are catered by leading steelmakers are witnessing cash flow issues. While the sharp rise in steel prices has led many builders and contractors to revise their project costs resulting in slower demand from such projects.  


Domestic rebar prices stable

In the southern region, rebar prices rose despite strong resistance from buyers. Rebar traded at PKR117,000-118,000/mt ex-works Karachi on Monday. In Punjab, G-60 rebar prices heard at PKR115,000-115,500/mt ex-works on Monday. 


Bala billet prices lost steam amid weak demand and trades reported at PKR91,500-92,500/mt ($571-580/mt) ex-works Punjab. Many traders and stockists offered discounts to encourage sales. Despite rising prices, steel demand remains unsupportive of production ramps. Many small mills could also cut production in winter. 


Prices for Art Q toke scrap equivalent to a mix of HMS and P&S flat at PKR73,000-73,500/mt ex-works Lahore. Trades for the Pure Q Toke (shredded) heard at PKR74,300-74,800/mt ($457-461/mt) ex-yards, with offers were still above PKR75,000/mt ex-yards following costly imported scrap. In the shipbreaking market, scrapped tankers and containers offers heard at $390-400/ldt cfr Pakistan.



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