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

Imported ferrous scrap offers to South Asian markets rose on expectations of a demand recovery in the next few weeks. Global cues spiked offers up by $5/mt Thursday with most suppliers hiking their offers amid tight supply. 



Pakistani ferrous scrap importers have turned active spurred by a rise in steel production and on indication that global scrap prices are on an upward trajectory. It could take another 2-3 days for the Pakistan customers to assess the situation as the international market seems to be very firm due to scarcity of the supply. Limited support from end-user demand in the country has however held most buyers from booking more scrap. 


The Davis Index for containerized shredded settled at $318/mt cfr Port Qasim, unchanged from Wednesday. Despite a jump in Turkish imported scrap prices in bulk by $5/mt in a day, Pakistani mills showed resistance to quickly accept these levels on Thursday. 

Offers for shredded reported at $318-320/mt cfr Port Qasim. Offers from UK yards on Wednesday for the grade reported at $320-325/mt cfr Port Qasim. Most traders are expected to turn willing to pay $320-322/mt cfr Qasim for shredded towards next week. 


The Davis Index for UAE-origin HMS 1&2 (80:20) Thursday settled at $304.14/mt cfr Port Qasim, up $0.07/mt from Wednesday. Trades for UAE-origin mixed #1 HMS and P&S sarya scrap were at $308-310/mt cfr Port Qasim on Wednesday boosted by higher Turkish bulk trades prices. The index for US-origin HMS 1&2 (80:20) settled at $305/mt cfr Port Qasim, unchanged from Wednesday in absence of trades. 


In Gadani’s shipbreaking market turned silent again this week and trades remained slow amid a cash crunch. 


In the domestic market, steel prices were flat on limited trades. Domestic ferrous scrap prices increased following high imported scrap offers. Bala billet prices were at PKR91,000/mt ex-works Punjab. High imported scrap prices pushed domestic Pure Q toke scrap equivalent to shredded at PKR70,000-70,300/mt ex-works Lahore on Thursday, up by PKR300/mt from early this week. Mills were struggling with limited cash flows and weak steel demand and found it not feasible to pay such high prices. However, a sharp jump in prices left no option for them to book material at higher prices. 



Bangladesh’s imported scrap market was slow in ferrous scrap bookings this week. Most infrastructure projects have resumed and demand is expected to return to normalcy after Mid-September, with mills turning 100pc operational. Imported bulk scrap offers, however, moved up further by $10-15/mt to $325-330/mt cfr Chattogram on Thursday. 


The daily Davis Index for containerized shredded settled unchanged at $325/mt cfr Chattogram from Wednesday. Offers for shredded from UK yards were at $330-335/mt cfr Chattogram, however, most buyers refused to accept offers or even place counter bids amid slow domestic demand. Trades are expected to stay slow but continue in Bangladesh on improving domestic fundamentals.


Trades for containerised South African P&S scrap were at $325-328/mt cfr Chattogram. 


High priced Indian sponge iron offers remained unviable for Bangladeshi steelmakers who opted for domestic scrap to fulfil their requirements. Indian sponge iron was offered at $310-315/mt cfr Chattogram.


The index for Latin America-origin HMS 1&2 (80:20) settled at $307.36/mt cfr Chattogram, up by $0.31/mt from Wednesday. A few containers traded at $307-308/mt cfr Chattogram, while #1 HMS traded at $315-317/mt cfr Chattogram. Brazilian suppliers offered very limited materials due to strong demand and higher realizations in the domestic markets, said suppliers. 


The index for US-origin HMS 1&2 (80:20) was at $313/mt cfr Chattogram, up by $1/mt from Wednesday. Sellers offered HMS 1&2 (80:20) at $315/mt cfr Chattogram, while buyers booked the grade at $310-313/mt cfr Chattogram.


A leading steelmaker in Chattogram GPH was buying aggressively in containers in order to restock the materials before they resume operations at their newly installed electric arc furnace. The steelmaker had postponed the commencement of this site due to the demand slump caused by the COVID-19 pandemic.   


In the domestic market, billet prices dropped by BDT500/mt on slow demand and traded at BDT41,000/mt ex-works on Thursday. Small scale rebar was offering billet at BDT49,000-50,000/mt ex-works. Large steel producers offered rebar at BDT56,000-57,000/mt ex-works, while a few offered discounts of BDT1,000/mt and sold them at BDT55,000/mt ex-works, said a steelmaker. 


In shipbreaking markets, after witnessing strong demand in the earlier weeks, appetite slowed down this week and though offers stayed firm, trades slowed. Bangladesh domestic prices are expected to remain stable, said a steel mill producer in Chattogram. Domestic shipbreaking scrap equivalent to P&S was traded at BDT30,500/mt ($359.6/mt) delivered mill on Thursday while HMS 1&2 (80:20) was at BDT29,000/mt ex-Chattogram. 


($1= PKR165.91; BDT85.02)

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