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

Imported ferrous scrap prices in South Asia showed mixed trends on Tuesday with Pakistani buyers booking a few containers paying slightly higher than Monday, while Bangladeshi steel mills cut their bids sharply. 


A couple of bulk cargo bookings reported late last week gave a boost to Pakistani buyers resulting in the conclusion of more trades. However, no other market in Asia showed stability, instead bids dropped on weak domestic fundamentals


In Turkey, the disparity between buyers’ bids and suppliers’ expectations widened as US-origin HMS 1&2 (80:20) bulk prices remained largely unchanged around $295-296/mt cfr Turkey. 


A few participants in Asian markets, however, claim these levels could further come under pressure falling by $10/mt on weakened rebar demand from Asian markets. Turkish mills are expected to book more bulk cargoes for the remaining October and November shipments.  



The Davis Index for containerized shredded, Tuesday, settled at $311.85/mt cfr Port Qasim, up by $1.01/mt from Monday. A few containerized shredded scrap deals were reported at $311-314/mt cfr Port Qasim on Tuesday from UK and European suppliers. Later, however, yards revoked offers hoping to raise the asking price. A few bids by secondary steelmakers for the grade were still at $305-307/mt cfr Port Qasim, even though finished steel sales remain affected in the country.  


Though shredded scrap trading showed an improvement, HMS scrap prices were under pressure. The Davis Index for UAE-origin HMS 1&2 (80:20) settled at $293/mt cfr Port Qasim on Tuesday, down $2/mt. Buyers lowered their bids for HMS 1&2 (80:20) to $285-290/mt cfr Port Qasim. Trades for UAE-origin mixed #1 HMS and P&S sarya scrap were reported at $295-300/mt cfr Port Qasim on Tuesday.  


The index for US-origin HMS 1&2 (80:20) settled at $290.71/mt cfr Port Qasim, down by $3.58/mt. Buyers mostly stayed away from trades on Monday. Most US-based yards were unwilling to offer large volumes citing expectations of a stronger market in October. Offers were at $295/mt cfr Port Qasim against bids of $285-290/mt cfr on Tuesday.  


In the domestic market, Bala billet prices remained flat amid very limited trade activities. Prices were reported at PKR91,200-91,500/mt ex-works Punjab on Tuesday. Domestic Pure Q toke scrap equivalent to shredded traded at PKR71,200-71,500/mt del Lahore plant, up by PKR200-300/mt from the prior week. Weakened demand for finished steel and slower recovery in infrastructure projects prevented domestic prices from gaining momentum.  


Most mills are expecting the appetite for ferrous scrap booking would recover around mid-October Pakistan has stayed away from bookings for almost a month. The government is likely to announce supportive measures to support industry’s faster recover from the COVID-19 pandemic.  



Mills in Bangladesh were under pressure due to weak domestic steel sales for more than a quarter. Heavy inventories of finished steel and imported scrap has become a cause of concern for them as mills held back purchases. Major mills are seeking government’s help from the pandemic as they believe demand is unlikely to recover before November.  


The daily Davis Index for containerized shredded, Tuesday, was at $321.79/mt cfr Chattogram, down by $2.5/mt from Monday. After Monday’s recovery, sentiments turned negative on Tuesday. Despite stable prices for bulk cargoes, weakened domestic fundamentals have impacted containerised scrap prices forcing bids to drop over $10/mt this week. Shredded was offered at $322-325/mt cfr Chattogram from the UK and Australian suppliers but no deals were reported.  


Prices have been under pressure with buyers staying away from major bookings for over a month. A few deals for shredded from Australia and New Zealand concluded at $320-323/mt cfr Chattogram. The scrap grade from the UK traded at $325/mt cfr Chattogram against offers of $330/mt cfr last week.


P&S scrap was offered at $315-320/mt cfr Chattogram on Monday, against bids of $310/mt cfr Chattogram. In the bulk market, suppliers from the US West Coast kept offers for HMS 1&2 (80:20) unchanged at $320-325/mt cfr Chattogram, with no major trades. 


The index for US-origin HMS 1&2 (80:20) in containers settled at $304.57/mt cfr Chattogram, down by $3.18/mt from Monday. Sellers offered HMS 1&2 (80:20) at $310-315/mt cfr Chattogram, while bids were only $300-305/mt cfr Chattogram on Tuesday. Major mills have enough inventories to fulfil their orders and appetite for imported scrap could remain weak till November, said a trader.


The index for Latin America-origin HMS 1&2 (80:20) settled at $305/mt cfr Chattogram, down by $1/mt from Monday. Offers were scarce and most Brazilian traders sought $305/mt cfr Chattogram for HMS 1&2 (80:20) against surprisingly low bids of $290-295/mt cfr Chattogram, said a trader on Tuesday. 


Small-scale furnaces looked to buy Indian sponge iron and imported HMS scrap targeting prices of $270-280/mt cfr Chattogram to be viable for them to import. Thus, only a handful of major steel mills selling finished steel were able to book imported scrap in the market.  


Domestic shipbreaking scrap equivalent to P&S traded at BDT30,500-31,000/mt ex yard Chattogram on Tuesday, flat from Friday. HMS 1&2 (80:20) was priced at BDT28,500-29,200/mt ex-Chattogram. 

Domestic small and medium scale mills reported drop in billet prices by BDT1,000/mt after remaining flat for over a month. Domestic billets were traded at BDT40,500-41,000/mt ex-works on Tuesday. Small-scale producers offered rebar at BDT49,000-49,500/mt ex-works  


In shipbreaking market, a deal of scrapped container was reported at $340/ldt cfr Chattogram against offers of $360-370/ldt cfr this week.  The country witnessed a decline in recycling volume by at least 50pc in Q3 2020 from a year ago.  

($1= PKR165.72; BDT84.67)



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