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

Imported ferrous scrap prices in South Asia were marginally buoyed by resumption in Turkish bulk trades at higher prices. Subcontinental scrap market is sensitive to Turkish market wherein a slight rise in prices leads to suppliers preferring Turkey over South Asia. Mills increase enquiries for imported ferrous scrap in Bangladesh, while in Pakistan heavy rains and weak domestic steel prices reduced bids for imported scrap.  


In Turkey, US-origin HMS 1&2 (80:20) bulk prices rose by $7/mt to $286.8/mt cfr Turkey on Wednesday. Despite this domestic scrap prices dropped by $5-8/mt in Turkey. Finished steel prices are likely to move up in the US and Europe in September, which would lead to more scrap consumption in the supplier markets.     



Heavy rains in the Karachi and nearby regions for the last three days has halted scrap trading in Pakistan. Ferrous scrap importers also slowed buying due to weak steel demand and cash constraints. Muharram celebration on Saturday and Sunday will have limited impact on the prices. Domestic steel prices are expected to correct as mill operate at 100pc capacity. Imported scrap demand is likely to stay weak as mills stick to buying immediate requirements.  


The Davis Index for containerized shredded settled at $313/mt cfr Port Qasim, up by $1/mt from Wednesday. Trades for the Europe-origin shredded reported at $310/mt cfr Port Qasim. Offers from UK supplier yards, however, remained stable for the grade at $313-315//mt cfr Port Qasim on Thursday. Most steel mills in Karachi were bidding for shredded upto $305-308/mt cfr Qasim, but no supplier was ready to accept these levels.  


In the domestic market, Bala billet prices were in the range PKR90,800-91,000/mt ex-works Punjab with shredded scrap Q toke was traded at PKR70,000-70,500/mt ex works Lahore down by PKR500/mt from the prior week.


The Davis Index for HMS 1&2 (80:20) of UAE-origin Wednesday settled at $296.67/mt cfr Port Qasim, up by $2.17/mt from Wednesday. Trades for UAE-origin mixed #1 HMS and P&S sarya scrap were at $300-305/mt cfr Port Qasim on Thursday, after the news of Turkish bulk trades at higher levels. The index for US-origin HMS 1&2 (80:20) settled at $295/mt cfr Port Qasim, unchanged from prior Friday. Trades reported at the index price while offers were at $305-310/mt cfr Port Qasim.  



Bangladesh’s imported scrap market was quiet on Thursday. Most mills have enough inventories booked through their earlier contracts and are likely to stay away from the market. Appetite for ferrous scrap has been slowed down after five bulk deals from the US and Japan since early August. Scrap offers have gone steel mills comfort levels.


Most large steelmakers expect Bangladeshi steel demand to rebounce in Q4 2020. Infrastructure projects have resumed and it could take another months’ time for mills to operate at 100pc capacity, said a steelmaker.  


The Davis Index for containerized shredded settled at $326/mt cfr Chattogram, up by $1/mt from Wednesday. Offers for shredded from UK yards were at $325-330/mt cfr Chattogram, a few trades concluded around index price while a few yards were able to get $330/mt cfr Chattogram on limited supply. Supply from Australia and New Zealand was limited as they traded containerised shredded in the range $320-325/mt cfr Chattogram.


The index for Latin America-origin HMS 1&2 (80:20) settled at $297.21t cfr Chattogram, up by $3.21/mt from Wednesday. A few containers traded at $295-298/mt cfr Chattogram, up $3-5/mt from the prior deals. Offers for #1 HMS from South America and Europe were at $305-310/mt cfr Chattogram, against the expectations of bids at $300-305/mt cfr Chattogram from small scale furnaces.  


A few buyers also traded LMS bundles at $270-275/mt cfr Chattogram and NP Busheling bundles at $335-340/mt cfr Chattogram.

The index for US-origin HMS 1&2 (80:20) was at $306/mt cfr Chattogram, up by $2/mt from Wednesday. Sellers offered HMS 1&2 (80:20) in the range $307-310/mt cfr Chattogram, while buyers booked the grade at $305/mt cfr Chattogram. 


In the domestic market, billet prices were BDT41,000-41,500/mt ex-works for square billets. The large rebar steel producers offered rebar at BDT56,000-57,000/mt ex producers, while a few offered a discount of BDT1,000/mt and sold them at BDT55,000/mt ex works, said a steelmaker.


In shipbreaking markets, offers for containers and tankers jumped to $340-350/ldt against last trades at $325/ldt indicating domestic steel prices could rise on higher inputs costs in the coming days, a steel mill owner said. A bulk carrier was offered at $315/ldt with no buyers on Tuesday. Domestic ferrous scrap traded at BDT30,000/mt ($354/mt) delivered mill on Wednesday stable over this week. 


($1= PKR168.26; BDT84.6)


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