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

South Asian imported ferrous scrap buyers lowered bids amid weak downstream demand. Pakistanis bought as per need basis while Bangladeshi steel mills booked Japanese small bulk cargoes and containerised trades at lower prices in line with global cues.


In Turkey, US-origin HMS 1&2 (80:20) bulk prices dropped to $289/mt cfr Turkey losing $5/mt from the prior week. Trades for Europe and Baltic origin cargoes reported at $284/mt cfr Turkey. Falling rebar prices and weakening Turkish currency could impact bids and weigh down global ferrous scrap prices further this week. 



Bangladesh mills are distressed in the face of weak domestic steel sales for over a quarter resulting in inventory pile-ups. Imported scrap prices remained unviable for most secondary steelmakers. 


The daily Davis Index for containerized shredded, Monday, was at $319.79/mt cfr Chattogram, down by $0.42/mt. Shredded of Australia and Africa-origin in containers traded at $320-322/mt cfr Chattogram this week. But UK yards were unwilling to offer material below $328-330/mt cfr Chattogram. Brazilian P&S scrap containers traded at $312-315/mt cfr Chattogram against bids of $308-310/mt cfr Chattogram. 


In bulk markets, a few Japanese small bulk cargoes deals were heard in the market including a #2 HMS deal at $305/mt and shindachi scrap at $330/mt cfr Chattogram. These prices are expected to drop further in the coming days. Bulk prices represent a $10/mt drop from prior bulk deals which concluded in early September.


The index for US-origin HMS 1&2 (80:20) in containers Monday settled at $299.38/mt cfr Chattogram, down by $1.91/mt from Thursday. Sellers offered HMS 1&2 (80:20) at $305/mt cfr Chattogram, while bids were at $298-300/mt cfr Chattogram. 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) Monday settled at $297/mt cfr Chattogram, down by $1/mt from Thursday. Offers were scarce and most Brazilian traders sought $300-303/mt cfr Chattogram for HMS 1&2 (80:20) against bids of $290-295/mt cfr Chattogram. Trades were reported at $302-305/mt cfr Chattogram for Latin American HMS #1 late last week.


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


Domestic small and medium scale mills held domestic scrap prices flat. Domestic billets traded at BDT40,000-40,500/mt ex-works stable from last week with expectations of an increase in prices. Small-scale producers offered rebar at BDT49,000-49,500/mt ex-works.



Pakistani scrap buyers slowed purchases amid a downtrend in prices. Domestic finished steel demand is yet to recover in Pakistan. The Davis Index for containerized shredded, Monday, settled at $306.19/mt cfr Port Qasim, down by $2.88/mt from Thursday. A few containerized shredded scrap deals from the UK/Europe yards reported at $305-308/mt cfr Port Qasim. Few bids from secondary steelmakers for the grade were still at $300-303/mt cfr Port Qasim. 


Coinciding with a drop in buying interest from India, HMS scrap prices in Pakistan continued their downward trend, however, Pakistani buyers paid $2-3/mt higher than Indian buyers. The Davis Index for UAE-origin HMS 1&2 (80:20) Monday settled at $285/mt cfr Port Qasim on Monday, down $2.21/mt from Thursday. Buyers lowered their bids for HMS 1&2 (80:20) to $280-285/mt cfr Port Qasim. Trades for UAE-origin mixed #1 HMS and P&S sarya scrap reported at $295-300/mt cfr Port Qasim, stable from the prior week.


The index for US-origin HMS 1&2 (80:20) settled at $285/mt cfr Port Qasim, down by $2.21/mt. Most US-based yards were unwilling to offer large volumes citing expectations of a stronger market in October. Offers were at $290/mt cfr Port Qasim against bids of $282-285/mt cfr on Monday. LMS scrap traded at $265/mt cfr Qasim.


In the domestic market, Bala billet prices were at PKR91,000-91,200/mt ex-works Punjab. Prices were flat to down amid thin trades. Domestic Pure Q toke scrap equivalent to shredded traded at PKR71,000-71,300/mt del Lahore plant. Weakened demand for finished steel and a slower-than-expected recovery in infrastructure projects prevented domestic prices from gaining momentum.


Traders expect scrap demand to recover around mid-October breaking a month-long sluggishness. The secondary downstream industry relies heavily on expensive imported raw materials. However, in the coming days rising local production will result in import substitution. 

Pakistan Association of Large Steel Producers (PALSP) has urged Pakistan’s Prime Minister Imran Khan to intervene in order to revive the steel industry. Many steelmakers are stressed and have been declaring heavy losses. Finished steel prices, on the other hand, have failed to show any improvement amid subdued end-user demand.


($1= PKR164.24; BDT84.77)


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