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

South Asian ferrous scrap importers are staying away from purchases, waiting for clarity in the global price direction. With only a hand full of buyers and suppliers present in the market and a wide gap between offers and bids, trades were largely halted. Steel end-user demand in the retail estate and construction sector remains a concern for the markets in the subcontinental region.


Bangladeshi buyers booked containers at prices which were slightly higher than the last week, while Pakistani mills resorted to trades on a need basis.  


In Turkey, the daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) climbed by $0.50/mt to $288/mt cfr on Tuesday, as demand improved. Offers are scarce, especially for October shipments, and were at prices above $290/mt cfr for the US and Baltic-origin HMS 1&2 (80:20)



Pakistani ferrous scrap buyers raised very few inquiries for limited volumes. Domestic finished steel demand is yet to recover, making imported scrap prices unviable for most mills. 


The Davis Index for containerized shredded settled at $308.33/mt cfr Port Qasim, up by $0.22/mt from Tuesday. Few containerized trades of UK-origin material concluded at the index price. Trades for containerized shredded of Europe-origin were reported at $305-307/mt cfr Port Qasim. Offers from UK yards were at $308-310/mt cfr Port Qasim. 

Few buyers even bought shredded at $303-304/mt cfr Qasim early this week. 


Mills resisted offers above $304-305/mt cfr Port Qasim for shredded scrap, indicating that the appetite for imported scrap is low. Especially since the supply of rolling scrap from ship recycling has improved.  


Amid renewed buying interest in India, HMS scrap prices in Pakistan could end their downtrend with offers registering an uptick. The Davis Index for UAE-origin HMS 1&2 (80:20), Wednesday, settled at $286/mt cfr Port Qasim, unchanged from Tuesday. Buyers were interested in HMS 1&2 (80:20) at $280-285/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, unchanged from the prior week.


The index for US-origin HMS 1&2 (80:20) settled at $287.43/mt cfr Port Qasim, up by $0.29/mt from Tuesday. Most US yards were unwilling to offer large volumes citing expectations of a strong market in October. Offers were at $290/mt cfr Port Qasim against bids of $285/mt cfr Qasim Monday. 


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



Bangladesh mills are still distressed in the face of weak domestic steel sales for over a quarter resulting in inventory pileups. Imported scrap prices remained unviable for most secondary steelmakers who have now lowered their production volumes to 50-60pc of capacity.  


The daily Davis Index for containerized shredded, Wednesday, was at $321.36/mt cfr Chattogram, up by $0.42/mt. Buyers preferred to buy shredded from Australia and Africa in containers amid quicker deliveries at $320-322/mt cfr Chattogram. UK yards were unwilling to offer material below $325-330/mt cfr Chattogram.


In the bulk market, US-origin HMS 1&2 (80:20) offers were at $315-320/mt cfr Chattogram with no buyers in the market. Prices are likely to drop further in the coming days as the appetite for bulk cargoes remains weak amid enough inventories in hand and rising domestic ship breaking scrap supply. 


The index for containerized US-origin HMS 1&2 (80:20) settled at $303/mt cfr Chattogram, flat from Tuesday. Sellers from South America offered HMS 1&2 (80:20) at $305-307/mt cfr Chattogram, while bids were at $295-300/mt cfr Chattogram. 


The index for Latin America-origin HMS 1&2 (80:20) settled at $300/mt cfr Chattogram, up by $1/mt from Tuesday. Offers were scarce, and most Brazilian traders sought $300-305/mt cfr Chattogram for HMS 1&2 (80:20) as domestic demand remains firm in their home country. Trades for HMS 1&2 (90:10) from the US west coast heard at $310/mt cfr Chattogram. 


Domestic shipbreaking scrap equivalent to P&S traded at BDT31,000-31,200/mt ex-yard Chattogram, up by BDT200-500/mt from last week. HMS 1&2 (80:20) was priced at BDT29,000-29,500/mt ex-yard Chattogram. 

Domestic small and medium-scale mills kept domestic scrap purchase prices flat. Domestic billets traded at BDT40,000-40,500/mt ex-works, unchanged from the last week. Mills, however, expect billet prices to increase in the coming days. Small-scale producers offered rebar at BDT49,000-50,000/mt ex-works, down by at least BDT4,000-5,000/mt compared to the prices quoted by large steel producers like BSRM and AKS.

In Bangladesh, prolonged weak domestic finished steel demand and delays in the resumption of infrastructural projects have forced steelmakers to curtail production. 


($1= PKR164.24; BDT84.94)


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