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

South Asian ferrous scrap importers are still away from the market. With only a hand full of buyers and suppliers present in the market and a wide gap between offers and bids, trades were largely limited. Steel end-user demand in the retail estate and construction sector remains a concern for mills in the region. The tightened gap between HMS and shredded scrap encouraged buyers to book shredded in Pakistan. While strengthening Pakistani currency against the US dollar is expected to support imports. 


In Turkey, the daily Davis Index for US-origin HMS 1&2 (80:20) was flat at $288/mt cfr. There were indications of new trades at slightly lower prices on Thursday, keeping South Asian buyers silent.



Pakistani ferrous scrap buyers booked shredded on need basis. Domestic finished steel demand is expected to recover gradually in the coming days once the Chinese market resumes after the Golden Week holidays.  


The Davis Index for containerized shredded settled, Thursday, at $306.12/mt cfr Port Qasim, down by $2.21/mt from Wednesday. Trades for containerized shredded of Europe-origin were reported at $303-305/mt cfr Port Qasim. Offers from UK yards were at $308-310/mt cfr Port Qasim.


Secondary mills in Northern Pakistan 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 ended their downtrend as sellers raised offers. The Davis Index for UAE-origin HMS 1&2 (80:20)settled at $288/mt cfr Port Qasim, up by $2/mt from Wednesday. Buyers were interested in HMS 1&2 (80:20) at $285/mt cfr Port Qasim but the offers were in the range of $290-295/mt cfr Qasim on Thursday. 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 $289.67/mt cfr Port Qasim, up by $2.24/mt from Wednesday. Most US yards were unwilling to offer large volumes citing expectations of a strong market in October. Offers were at $290-295/mt cfr Port Qasim against bids of $285/mt cfr Port Qasim.

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 PKR71,200-71,300/mt del Lahore plant, slightly up from last week. 


Trades for commercial rebar picked up compared to the prior week. Local rebar prices are at PKR103,000/mt ex-works. Leading rebar producers in Karachi kept base offer prices flat at PKR111,000-112,000/mt ex-works. Some mills, however, are offering a discount of around PKR1,000/mt to encourage sales. 



Imported scrap 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, Thursday, was at $322.86/mt cfr Chattogram, down by $1.5/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/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 at those levels. 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 $305/mt cfr Chattogram, up by $2/mt from Wednesday. Despite bids of $300/mt cfr, mills were unwilling to lower prices. 


The index for Latin America-origin HMS 1&2 (80:20) gained $2/mt to $302/mt cfr Chattogram from Wednesday. 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 were reported at $310/mt cfr Chattogram. Suppliers could target $305-307/mt cfr Chattogram levels in the coming days. 


Domestic shipbreaking scrap equivalent to P&S traded at BDT31,000-31,200/mt ex-yard Chattogram, flat over this 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= PKR163.86; BDT84.75)


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