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

The resumption of bulk ferrous scrap trades in Turkey and restocking of scrap inventories by South Asian mills pushed up imported scrap prices in the region. Prices inched up on a daily basis this week. Pakistani buyers continued shredded scrap bookings in containers while Bangladeshi mills preferred lower-priced HMS scrap amid limited domestic steel support. Most steelmakers believe the gradual resumption of infrastructural projects will create demand from end-users and thus, preferred to restock inventories accordingly. 



Pakistan ferrous scrap importers booked some containers for their immediate needs on Thursday. A partial resumption in mega infrastructure projects will improve steel demand in the country.


The daily Davis Index for containerized shredded, Thursday, rose by $0.59/mt to settle at $315.73/mt cfr Port Qasim. Several trades for UK-origin shredded in containers were heard at $315-316/mt cfr Port Qasim. A few offers rose to $318-320/mt cfr Port Qasim following global cues. Suppliers and traders anticipate Pakistan mills could continue restocking as the prices are expected to rise further. 


Dubai-origin #1 HMS scrap in containers traded at $310-312/mt cfr Port Qasim. Offers for PNS sarya scrap were at $313-315/mt cfr. The Davis Index for UAE-origin HMS 1&2 (80:20) settled at $303/mt cfr Port Qasim, up by $2/mt from Wednesday. Mills chose to buy shredded over HMS scrap this week. Offers from South American ferrous scrap suppliers were at $295-300/mt cfr Qasim. Most Brazilian yards preferred to sell in the domestic markets.  


The index for US-origin HMS 1&2 (80:20) settled at $305.29/mt cfr Port Qasim, up by $3/mt from Wednesday. In the domestic market, Bala billet prices were flat on weak demand at PKR90,000-90,200/mt ex-works Punjab. 


Domestic scrap declines

Domestic Pure Q toke scrap, equivalent to shredded sold at PKR68,500-69,000/mt del Lahore mill, down by PKR500/mt from the prior day. Most mills preferred imported scrap over domestic material due to the appreciation of Pakistani currency to PKR161.3 against $1 from PKR162.5 last week. Leading rebar producers in Karachi offered material at PKR110,000-111,000/mt ex-works. 



Bangladeshi mills stayed away from the bulk market and purchased scrap in containers on a need basis. A mill in Chattogram, however, resorted to active trading as it gears to commence production at a new facility. The mill, after purchasing cargoes from Australia and Japan last week, is still keen on booking containers. 


The Davis Index for containerized shredded, Thursday, settled at $325.86/mt cfr Chattogram up by $1.36/mt. Offers on Thursday were majorly at $328-330/mt cfr Chattogram while a few trades closed at $320-323/mt cfr Chattogram. Australia and UK-based suppliers, however, refused to lower their offers below $328-330/mt cfr Chattogram citing a supply crunch.


In the bulk market, West Coast US-origin HMS 1&2 (80:20) offers were at $320/mt cfr Chattogram, up $5-7/mt from the last bulk deal reported in the prior week. 


The daily index for containerized US-origin HMS 1&2 (80:20), Thursday, settled at $315.5/mt cfr Chattogram, up by $2.5/mt. Trades for the UK and US-origin HMS 1&2 (80:20) reported at $315-318/mt cfr Chattogram on Thursday. The index for Latin America-origin HMS 1&2 (80:20) settled at $311/mt cfr Chattogram, up $2/mt from Wednesday. South American yards sold HMS #1 and HMS 1&2 (90:10) at $315/mt cfr Chattogram on Wednesday. Bangladeshi buyers had to pay higher in line with rising demand and prices in India.


Domestic shipbreaking scrap equivalent to P&S traded at BDT31,000/mt ex-yard Chattogram. HMS 1&2 (80:20) was priced at BDT28,500-29,000/mt ex-yard Chattogram, unchanged from late last week. Dhaka-based finished steel producers sold rebars at BDT48,500/mt ex-works, down BDT500/mt from the prior week. Most mills struggled to stay profitable and may curtail production and have even cancelled discounts on rebar and billets. 

($1= PKR162.05; BDT84.8)

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