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

The daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) was unchanged at $425.44/mt cfr on Friday as several countries broke for a long Easter weekend and US suppliers remained absent.


Baltic offers are hovering at around the $430/mt cfr level with mills continuing to suggest lower levels.


The US domestic market is expected to trade next week and early sentiment points to large increases for industrial scrap grades and weakness in obsolete grades.


Turkey’s mills see any potential weakness in the US as a buying opportunity, while suppliers are bullish on grades like shredded and P&S 5ft, which US mills will soak up in an effort to alleviate the shortage of prime scrap. As a result, some US suppliers have said they are not interested in a market below $440/mt.


Also contributing to the uncertainty in price direction is the concern in Turkey about future interest rates given the recent top-level personnel changes at its central bank. The first casualty of the domestic uncertainty has been the Turkish lira, which continues to trade below TRY8 to the US dollar as markets are unable to gauge how this will play out for its construction and infrastructure sectors, and of course, Turkey’s overall economy.


Export markets for semi-finished and finished steel are strong, however, and mills will look to ramp up export volumes should the domestic markets falter. 


If China completely removes rebates on steel exports it will embolden other countries like India and Turkey to increase their exports since China’s export costs will rise by $80-100/mt. The country is considering doing this to reduce its steel output and increase the consumption of domestic steel.


Global hot-rolled coil and rebar prices are still trailing the US but such a move would very quickly narrow those gaps as coil and rebar supply in Asia would tighten rapidly in such an environment.


There is already a bullishness across Asian markets, evidenced by a $5/mt increase in bulk import prices this week and a $15-20/mt gain in container import prices across Asia this past week.

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