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

Pakistani and Bangladeshi scrap importers delayed purchases amid weak domestic steel demand. Some buyers expect a correction in international scrap prices, while a few are optimistic that the market will accept higher prices in the coming days. Amid limited domestic demand, mills offered discounts to liquidate their finished steel inventories. In Bangladesh, limited buyers were active in the market for containers but inquiries rose as ferrous scrap offers continued to rise sharply.



Bangladesh’s steelmakers are struggling with cash flow crunch as the COVID-19 crisis has disturbed their finances. Low sales of construction steel have led to losses in revenue and dues in the form of payment to utilities and other service providers. Steel mills are under pressure to liquidate their finished steel inventories at a discount to avoid defaults. Discounts offered by manufacturers have kept domestic steel prices lower despite recovering demand.


The Davis Index for containerized shredded settled Monday at $330/mt cfr Chattogram down $2/mt from Friday. The index marginally dropped in line with weak demand as the prices adjusted from a 13-month scaled last week.


A bulk deal booked two weeks ago was confirmed on Monday. A mill booked 20,000mt Brazilian P&S cargo at $323/mt cfr Chattogram. 

Indian sponge iron prices remain volatile and are still unviable for small steelmakers in Bangladesh.


Trades for containerised UK-origin HMS 1&2 (80:20) reported at $315-320/mt cfr Chattogram stable from the prior week. The index for US-origin HMS 1&2 (80:20) was flat at $320/mt cfr Chattogram from Friday. Sellers offered HMS 1&2 (80:20) at $320/mt cfr Chattogram, while buyers were still at $315-318/mt cfr Chattogram.


The index for Latin America-origin HMS 1&2 (80:20) settled at $310/mt cfr Chattogram, down by $0.93/mt from Friday. A few containers for Brazilian HMS 1&2 (80:20) traded at $308-310/mt cfr Chattogram, while #1 HMS of South Africa and South America origin traded at $317-320/mt cfr Chattogram. 


Domestic shipbreaking scrap equivalent to P&S traded at BDT30,300-30,500/mt del mill while HMS 1&2 (80:20) traded at BDT29,000/mt ex-Chattogram. Most small and medium scale steelmakers in Dhaka expect prices to drop further in the coming days by around BDT1,500-2,000/mt. While small scale producers offered rebar at BDT49,000-49,500/mt ex-works. 



Pakistan steel mills are likely to resume imported ferrous trades amid a jump in domestic scrap prices on limited supply. Few suppliers offered scrap on Monday. Pakistani buyers are expected to book containers as demand from downstream sectors is gradually recovering to pre-COVID levels. Infra projects funded by Chinese investors would help Pakistan’s steel sector to recover faster, said a steel mill owner.  


The Davis Index for containerized shredded on Monday settled at $323.93/mt cfr Port Qasim, down $4.07/mt from Friday. In line with slow trades in Turkey, Pakistani mills appetite for imported scrap have also declined. Trades for UK-origin shredded reported in containers at $323-325/mt cfr Qasim. Bids dropped to below $320/mt cfr Qasim Monday against offers of $325-330/mt cfr Qasim on Friday. 


The Davis Index for UAE-origin HMS 1&2 (80:20) Monday settled at $310/mt cfr Port Qasim, stable from the prior day. Trades for UAE-origin mixed #1 HMS and P&S sarya scrap were reported at $315-320/mt cfr Port Qasim. The index for US-origin HMS 1&2 (80:20) settled at $307.86/mt cfr Port Qasim, down $0.14/mt as most buyers placed bids of $305/mt cfr Qasim.


In the domestic market, Bala billet prices reported at PKR92,500/mt ex-works Punjab with limited trades being materialised. 

Higher imported scrap pushed domestic Pure Q toke scrap equivalent to shredded at PKR72,300-72,600/mt ex-works Lahore, up PKR1,000/mt from a week ago. Mills are struggling with limited cash flow and weak steel demand. 


Finished steel prices in southern Pakistan remained low. Leading steelmakers offered discounts of upto PKR2,000/mt to liquidate their inventories. Rebar trades reported PKR109,000-110,000/mt ex-Karachi after discounts. Gadani’s shipbreaking market remained stable in the range of $350-260/ldt for scrapped containers and tankers. 


($1= PKR166.27; BDT84.81)


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