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

Imported ferrous scrap offers to South Asian markets rose buoyed by a rise in Turkish bulk trades which concluded at a higher price last week. Bangladeshi mills booked tonnages at higher prices following strengthening domestic demand. The steel demand from infrastructure projects in the country is recovering. Heavy rains in Pakistan, however, disrupted trades and the country lost its position as the most preferred destinations for ferrous scrap in South Asia.



Pakistani ferrous scrap importers remained slow amid heavy rains in the Karachi and nearby regions, which halted finished steel trades and construction activities. Trades are expected to improve this week with the resumption of production. 


The Davis Index for containerized shredded settled at $315/mt cfr Port Qasim, up by $1/mt from Monday. Trades for Europe-origin shredded reported at $312-313/mt and the UK yards sold at $315/mt cfr Port Qasim on Friday. Offers from UK yards remained stable for the grade at $315-320/mt cfr Port Qasim on Monday. Most steel mills in Karachi were bidding for shredded at $310-313/mt cfr Qasim, but suppliers refused these levels. 


The Davis Index for UAE-origin HMS 1&2 (80:20) Monday settled at $301.88/mt cfr Port Qasim, up by $2.88/mt from Friday. Trades for UAE-origin mixed #1 HMS and P&S sarya scrap were at $305/mt cfr Port Qasim on Friday boosted by higher Turkish bulk trades prices. The index for US-origin HMS 1&2 (80:20) settled at $300/mt cfr Port Qasim, up $3/mt from prior Friday. 


In Gadani’s shipbreaking markets, trades remained slow. Offers for scrapped ship imports were heard at $350-360/ldt amid thin trades. Cash crunch and depreciating Pakistani rupee have held back recyclers from high-risk deals. 


In the domestic market, steel prices were rangebound on limited trades. Bala billet prices were at PKR90,500-91,000/mt ex-works Punjab with shredded scrap Q toke at PKR69,700-70,000/mt ex-works Lahore, down by PKR500/mt from the prior week. 




Bangladesh’s imported scrap market was tepid with a lower appetite for bulk ferrous scrap cargoes. Most infrastructure projects have resumed but it could take another months’ time for them to reach 100pc operational and by then mills would return to full capacity, said a steelmaker.


In bulk markets, a deal for 35,000mt US-origin cargo with shredded was heard at $313/mt cfr Chattogram and HMS 1&2 (80:20) at $308/mt cfr Chattogram late last week.  


The Davis Index for containerized shredded settled at $326/mt cfr Chattogram, unchanged from Friday. Offers for shredded from UK yards were at $325-330/mt cfr Chattogram on Monday. Supplies from Chile, Australia and New Zealand were limited but a few trades for containerized shredded were reported at $315-325/mt cfr Qasim. The strengthening of domestic steel prices and resumption in construction projects has pushed mills to book more scrap cargoes. 


The index for Latin America-origin HMS 1&2 (80:20) settled at $305/mt cfr Chattogram, up by $5.5/mt from Friday. A few containers traded at $303-305/mt cfr Chattogram, up $3-5/mt from the prior deals. Trades for #1 HMS from South America concluded at $312-314/mt cfr Chattogram, refusing bids at $305-307/mt cfr Chattogram from small scale furnaces.


The index for US-origin HMS 1&2 (80:20) was at $310/mt cfr Chattogram, up by $2/mt from Monday. Sellers offered HMS 1&2 (80:20) in the range $310-312/mt cfr Chattogram, while buyers booked the grade at $307-308/mt cfr Chattogram.


In the domestic market, billet prices were BDT41,500/mt ex-works for square billets sales. Large steel producers offered rebar at BDT56,000-57,000/mt ex-works, while a few offered 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 another $10/ldt to $350-360/ldt against the last trades at $325-330/ldt indicating, Bangladesh domestic prices could rise on higher inputs costs in the coming days, a steel mill owner said. Domestic shipbreaking scrap equivalent to P&S was traded at BDT30,500/mt ($359.6/mt) delivered mill on Monday. 


East Asia


In Taiwan, US-origin HMS 1&2 (80:20) offers were at $270-275/mt cfr Taiwan, with limited trades heard at $268-270/mt cfr on Monday. The daily Davis Index for containerized US-origin HMS 1&2 (80:20) settled flat at $270/mt cfr Taiwan. Market participants informed that while offers are rising from Japan and the US, Taiwanese mills are not buying volumes for the same instead they are looking for cheaper South American scrap. They also mentioned that Japanese mills will start increasing production in October, due to which ferrous scrap prices are not expected to fall. 

Turkish markets stayed strong with daily index settling at $289.8/mt, up by $1/mt on Friday, US origin ferrous scrap offers are expected to rise further this week. In the domestic market, Feng Hsin steel held prices unchanged for Taiwanese scrap. 

Market participants indicated that most Taiwanese mills could raise the prices in a week or two, but for now, prices are not viable for steelmakers as finished steel demand is still sluggish.

($1= PKR167.34; BDT84.81; TWD29.39)


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