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

Domestic steel prices in Pakistan continued to rise despite heavy winter hitting logistics in parts of the country. Prices increased by over PKR5,000/mt ($31/mt) from the last week. The market has been able to absorb the price rise which has instilled optimism among ferrous scrap suppliers and traders. Mills with limited inventories could resort to trades actively once suppliers return after the new year holidays. 


The rise in steel prices is likely to lift imported scrap prices too. A widened spread by $40-50/mt between scrap-rebar and scrap-billet to $200/mt from around $160/mt last week could encourage mills to restock ferrous scrap. 


The Davis Index for containerized shredded, Wednesday, rose by $3.94/mt from Tuesday to settle at $469.17/mt cfr Port Qasim. Trades for EU/UK-origin containerized shredded concluded in thin quantities at $465-470/mt cfr Qasim with offers of $470-475/mt cfr Qasim. Strengthening steel prices and tight domestic scrap supply, trades for imported scrap are expected to pick up in the coming days.


In Turkey, bulk imported scrap trades have paused as supplier countries are celebrating the new year. Domestic ferrous scrap prices came under pressure due to currency appreciation. 

Global market sentiment is mixed with the spread of a new strain of COVID-19 in Europe. In Pakistan, mills continued to face cash flow issues. In China, heavy winter has affected steel demand significantly pulling iron ore import prices down to $160/mt cfr China while HRC and billet prices dropped by $10-15/mt over this week. 


Dubai suppliers were more inclined towards catering to the domestic market. But those offering material to South Asian markets, preferred to sell in Pakistan as bids from Indian buyers were lower.

The Davis Index for UAE-origin HMS 1&2 (80:20) settled at $448/mt cfr Port Qasim, unchanged from Tuesday. Offers were heard at prices above $450-460/mt cfr Port Qasim for containers of mixed #1 HMS and P&S sarya. 


The index for US-origin HMS 1&2 (80:20) settled at $448.75/mt cfr Port Qasim, down by $2/mt from Tuesday in absence of trades. Most shipping lines are expected to stay away from loading activities due to the new year holidays. 

Activities will pick up only after Jan 4. 


Billet and Rebar 

On Wednesday, domestic Bala billet prices increased further by PKR1,500-2,000/mt from a day ago to PKR105,000-106,000/mt ($654-660/mt) ex-works. CC billet offers exceeded PKR112,000-113,000/mt ex-works for grades 40 and 60. Prices have increased by around PKR15,000/mt ($93/mt) in two weeks. 


In Karachi, all major rebar makers have hiked prices citing high ferrous scrap in the international market. Prices quoted by major mills are over PKR130,000/mt ($810/mt) ex-works. Amreli and Agha steel hiked prices by PKR5,000-7,000/mt this week despite trades dipping at these price levels. A major mill was heard to have lifted rebar asking rates to PKR134,500-135,500/mt for 12-32mm rebar. In Punjab, G-60 rebar offers were at PKR125,000-126,000/mt ex-works on Wednesday.


Domestic scrap

Following strengthening global cues, domestic scrap prices rose PKR2,000-2,500/mt in the last two days. Prices for Art Q toke scrap equivalent to a mix of HMS and P&S were at PKR83,500-84,000/mt ex-yards Lahore on Tuesday. Prices Pure Q Toke (shredded) were at PKR85,500-86,000/mt ($533-536/mt) ex-yards. Firm domestic scrap prices could give imported scrap trades an impetus after a month-long hiatus. In the shipbreaking market, offers for scrapped vessels were at $440-450/ldt cfr Pakistan, with most recyclers off for the new year holidays.



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