Ferrous Market Update 12/04/2020

 

Turkey

  • The daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) rose by $7.06/mt on Friday amid a significant rise in offers.
  • Some Turkish mills were looking for ferrous scrap cargoes for January and February shipment, but found only a few offers. Some suppliers decided to step back, while others revised offers higher. European exporters have started asking $370/mt cfr for HMS 1&2 (80:20), while US and Baltic suppliers have raised their offers to $375-380/mt cfr for the same material.
  • The daily domestic spot rebar prices in Turkey were unchanged at TRY4,890-4,970/mt ex-works, including 18pc VAT, on Friday, while the daily exported rebar prices in Turkey held in the range of $530-535/mt fob. ($1 = TRY7.82)

 

Turkey domestic

  • The weekly Davis Index for DKP scrap (equivalent to auto bundles) in Turkey rose by TRY136/mt ($17/mt) on Monday amid solid demand for the material and an uptrend in the imported ferrous scrap market. 
  • Most mills raised their purchase prices between Nov 26 and 28.
  • Purchase prices for shipbreaking scrap in Izmir surged by $30/mt to $345/mt delivered over the week amid high buying activity. ($1 = TRY7.79)

 

CIS

  • The weekly Davis Index for HMS 1&2 (80:20) jumped by $18/mt fob Baltic Sea basin and by $20/mt fob Black Sea basin on Monday in a bullish export market.
  • Limited availability of the material resulted in sporadic ferrous scrap sales from Russia to foreign outlets. Sellers from St Petersburg and Rostov-on-Don raised offers to Turkey significantly.
  • Collection prices increased further in Russia amid the uptrend in the export market. The weekly Davis Index for HMS 1&2 (80:20) rose by RUB400/mt ($5/mt) delivered St Petersburg dock on Monday and jumped by RUB1,350/mt delivered Rostov-on-Don dock. ($1 = RUB76.20)

 

Europe

  • The weekly Davis Index for HMS 1&2 (75:25) in the ARAG region surged by €16/mt ($19/mt) on Tuesday amid a promising export market outlook.
  • Ferrous scrap suppliers are currently competing for tonnages and those from Belgium and the Netherlands raised collection prices further to spur inflow to their yards.
  • European exporters were targeting $350/mt cfr Turkey for HMS 1&2 (75:25) on Tuesday in anticipation of achieving $370/mt cfr in Turkey for US-origin HMS 1&2 (80:20), considering the rising rebar prices in the country. (€1 = $1.20)

 

UK dockside

  • Davis Index’s weekly north and south UK HMS 1&2 (80:20) ferrous scrap indices increased by £6/mt, respectively, delivered dockside, on Tuesday.
  • Exporters in the UK continue to fight against efforts to raise dock tags since some of them still need to fill cargoes that were sold before prices shot past $300/mt cfr Turkey for HMS 1&2 (80:20). 
  • Some suppliers were concerned that dockside prices have not risen to the expected levels given the current strength in the export market. 
  • Turkish HMS 1&2 (80:20) ferrous scrap import prices jumped by $20/mt over the past week to $359.70/mt cfr on Dec 1.
  • Suppliers now hope that docks will raise prices significantly over the next 10 days as vessels booked for late December and January shipments appear to be filled.
  • The weekly indexes for north and south UK OA (Plate & Structural) increased by £1/mt over the same period, delivered dockside.
  • Davis’ north and south UK 5A/5C (frag feed) ferrous scrap indexes climbed by £2/mt delivered dockside over the past week. (£1 = $1.34)

 

Spain

  • Davis Index’s weekly northern Spain HMS 1&2 (80:20) and shredded small bulk ferrous scrap indices jumped by €13/mt cfr ($16/mt), on Friday.
  • Shortsea bulk ferrous scrap tags were driven higher by multiple factors over the past week, comprising of stronger UK dockside purchase prices, higher freight rates, and robust demand in major competing markets.
  • Davis Index understands that some Turkish mills brought purchases forward for January shipment, exacerbating the recent price hikes and driving the Turkish HMS 1&2 (80:20) ferrous scrap import index $11/mt higher to $360.94/mt over the same period.
  • Following a £6/mt ($8/mt) increase early last week, Davis Index has also heard that a major UK-based ferrous bulk exporter has recently raised HMS 1&2 (80:20) dockside purchase prices by a further £5/mt to a maximum of £195/mt, delivered dock.
  • Another UK-based ferrous scrap processor commented that strong Baltic “stems” – the quantity and availability of cargo proposed to be loaded – had pushed both deep-sea bulk and shortsea coastal rates up by $26/mt and €27/mt respectively.
  • Davis Index’s UK small bulk ferrous scrap HMS 1&2 (80:20) and shredded also climbed by €6/mt fob on Dec 4. (€1 = $1.22) (£1 = $1.35)

 

US dockside

  • US East Coast and Houston dock collection prices for ferrous scrap continued to climb but lagged when compared with the strength in exports and the domestic market. 
  • Export yard price increases of at least $25/gt or more are expected in the near term. Supply is also tightening as dealers hold on to material in anticipation of higher prices.
  • Dockside prices have gradually risen throughout November in tandem with exports between Turkey and the US, where prices have increased by about $67/mt cfr for #1 HMS between Oct 27 and Dec 1. 
  • Export yard buying prices for #1 HMS on the East Coast range between $255-260/gt on Tuesday, up by around $30/gt since Oct 27. Market participants expect the price to rise soon considering the growing gap between dock collections and exports. However, some sellers clarified the price lag stating that exporters are still fulfilling tons on lower priced orders from late October.
  • Domestic steel and scrap demand are strong with December trading which began this week with prices up $70/gt in Detroit for certain grades creating price momentum.
  • In Boston, the weekly Davis Index for export yard #1 HMS climbed by $5/gt delivered, P&S 5ft increased by $6/gt delivered Boston dock, and shredder feed jumped by $13/gt delivered. 
  • The weekly Davis Index for export yard buying prices in New York rose by $1/gt delivered for #1 HMS, by $2/gt delivered dock for P&S 5ft, and by $21/gt delivered for shredder feed. 
  • The price surge for shredder feed was in response to new order fulfillment while considering the grade’s tightness. Other materials, such as #1 HMS and P&S 5ft could follow this trend shortly as new deals between the US and Turkey transpire.
  • In Philadelphia, the Davis Index for export yard collection prices of #1 HMS increased by $2/gt delivered and P&S 5ft went up by $4/gt delivered Philadelphia dock. The index for shredder feed soared $25/gt delivered.  
  • In Houston, the weekly Davis Index climbed by $15/gt for #1 HMS and $16/gt P&S 5ft delivered Houston dock. The shredder feed index increased $11/gt delivered. 
  • Trading in the domestic Houston region is described as “on fire” as attention is now focused away from docks despite the moderate increases.
  • The US West Coast ferrous scrap dock prices climbed in Los Angeles and Portland but were rangebound in San Francisco due to rising export demand and tight scrap flows into yards. 
  • Los Angeles docks have raised the effective deal prices as they compete for inventories, especially, for quiet deals to obtain larger demolition loads. 
  • The latest scrap import deals at $359/mt cfr Turkey are increasing expectations that US-sourced deals will be $60-65/mt higher than an early November transaction. US rebar importers are actively considering import loads as US domestic finished steel prices increase, which is further supporting production demand at Turkish mills. 
  • Despite concerns over the temporary surge in COVID-19 infections and the potential effect of lockdowns on the domestic and scrap importing economies, most participants believe prices will remain strong as Bangladesh, India, and other Asian net scrap importers continue planning production into Q1 2021 with limited domestic scrap. 
  • South Korean and Taiwan buyers are stating a preference for domestic scrap due to rising Japanese, US, and Russian scrap tags. With increased production expected in December and January, scrap import buys seem inevitable along with higher domestic prices.  The net effect of this trend on scrap prices in December is still unknown since a fall in iron ore prices would pull down scrap prices, though, the tight supply could support the market. 
  • The weekly Davis Indexes in Portland climbed as US domestic mills began to trade this week. The smaller steel-producing region is expected to increase prices on the lower end of the $30-60/gt increases and docks are having to compete for inventory. The index increased by $31/gt delivered for #1 HMS, by $29/gt delivered for P&S 5ft, and by $24/gt delivered for shredder feed.  
  • The San Francisco Davis Indexes remained rangebound. HMS #1 and P&S 5ft were flat and shredder feed rose by $3/gt delivered. 
  • Los Angeles’ Davis Indexes increased by $18/gt delivered for #1 HMS, P&S 5ft rose by $20/gt delivered, and shredder feed climbed by $17/gt delivered. 

 

US containers

  • US containerized scrap prices continued the upward trend that began in October. Prices could increase further amid high demand and scrap scarcity because of lower demolition projects, substantially reduced oil rig work, decreased vehicle shredding volumes, and lower peddler activity. 
  • The shortage in containers may be a limiting factor in the upward price trend as they impact logistics. Vietnamese and South Korean mills have opted for bulk scrap buys over the past few weeks to avoid delivery problems in early Q1.
  • Japanese export offers increased by $10-15/mt against the prior week supporting US export prices. Vietnam is facing stronger domestic finished steel sales including those of rebar, thereby, requiring restocking of ferrous scrap. 
  • Taiwanese mills are also succeeding in raising finished steel prices on increased raw material prices. Some Asian mills are searching for ferrous scrap from destinations other than the US due to the jump in prices, container shortage, and increased freight rates. 
  • Bangladeshi and Pakistani buyers are actively inquiring about scrap due to improving steel demand. Several Indian buyers acknowledged to Davis Index that prices could potentially climb higher through December on limited global scrap inventories. 
  • US domestic scrap prices increased by $50-90/gt against November settled prices after the December trading week launched on Wednesday. The East Coast traded at up $50-60/gt depending on grade against November settled prices and Detroit increased by $70/gt across all grades. 
  • In the St. Louis region, #1 HMS, P&S 5ft, and shredded were trading up at $70/gt while prime grades such as #1 busheling increased deals up to $80-90/gt compared to November settled deals on Thursday. In the South trading may settle at around $50-60/gt gains. 
  • Slow scrap flows for feedstock are affecting inventory availability in a period of high demand from domestic mills and export markets. 
  • The weekly Davis Indexes in New York rose for the seventh consecutive week, increasing by $30/mt for #1 busheling on tight inventories and active buys from Asian destinations. HMS 1&2 (80:20) increased by $24/mt, P&S 5ft rose by $12/mt, and shredded rose by $13/mt. Machine shop turnings were flat.
  • The Davis Indexes in Los Angeles climbed for the eighth consecutive week with #1 busheling and P&S 5ft rising by $12/mt. HMS 1&2 (80:20) and shredded climbed by $9/mt. The HMS 1&2 (80:20) index in the region has risen by $51/mt from $248/mt fas in early October. 
  • In San Francisco, the index for #1busheling increased by $17/mt, both HMS 1&2 (80:20) and P&S 5ft rose by $16/mt and shredded climbed by $15/mt.
  • In Seattle, #1 busheling increased by $15/mt while HMS 1&2 (80:20) and P&S 5ft both rose by $12/mt. Shredded climbed by $10/mt.

 

Mexico

  • Mexico’s domestic ferrous scrap prices across all grades in the North, Central, and Bajío regions are expected to rise by $50/mt in December as demand outpaces the supply of scrap.
  • Mexican mills across the three regions are struggling to collect scrap and are paying premiums to import the material to fulfill demand. 
  • A market participant with operations in the Central and Bajío regions said that Turkey, a key destination for ferrous scrap exporters, has monopolized the market purchasing 22 vessels per month causing a supply squeeze for Mexican importers.
  • Scrap prices in North Mexico rose $7.5/mt and may climb further as mills in this region continue applying increases of around MXN250/mt ($12.6/mt) to secure stock for the next two months.
  • In North Mexico, the weekly Davis Indexes increased by MXN150/mt delivered Mexico consumer for machine shop turnings, P&S 5ft, shredded, and #1 busheling. The index for HMS 1&2 (80:20) rose by MXN33/mt delivered.
  • Scrap prices in the Bajío and Central regions rose between $7.6- 12.6/mt, respectively, during the week.
  • The weekly Davis Indexes in Bajío for HMS 1&2 (80:20) rose by MXN150/mt delivered Mexico consumer, P&S 5ft increased by MXN250/mt delivered, shredded climbed by MXN125/mt delivered, #1 busheling moved up by MXN250/mt delivered, and machine shop turnings increased by MXN150/mt delivered.
  • In Central Mexico, the weekly Davis Indexes increased by MXN250/mt delivered for #1 busheling, machine shop turnings, and shredded. P&S 5ft increased by MXN150/mt delivered, and HMS 1&2 (80:20) climbed by MXN600/mt delivered Mexico consumer. ($1=MXN19.76)

 

Japan  

  • Domestic and export ferrous scrap prices in Japan climbed further this week. Tokyo Steel raised domestic scrap prices for the third time in December. Effective Dec 5, Japan’s Tokyo steel lifts ferrous scrap purchase prices by JPY1,000/mt ($9) at Tahara and Okayama works and by JPY500/mt ($5) at Utsunomiya works. 
  • Increased buying in Turkey leading to bullish offers from other scrap exporting countries have led market participants to expect a further rise in ferrous scrap prices. 
  • Asian buyers may focus on Japanese bulk and Russian A3 scrap to offset the rise in the US scrap prices.
  • The weekly Davis Index for #2 HMS rose by JPY2,667/mt fas amid limited deals and rising offers. In the export market, the weekly index for the same grade rose by JPY2,740/mt to fob Japan. Deals were heard for the grade cfr Vietnam this week.
  • In the Kanto region, the Davis Index for #1 HMS fas port rose by JPY2,250/mt. The index for the same grade rose by JPY2,375/mt fob Japan, with no deals heard at the index price.
  • The weekly Davis Index for HS and shredded grade rose by JPY2,417/mt and JPY2,250/mt fas, respectively. 
  • Yards offered Japanese HMS 1&2 (50:50), Wednesday, at $365/mt cfr Taiwan, up by $15/mt from the prior week. The index for the grade rose by $25/mt cfr Taiwan. In Vietnam, the index for Japanese HMS 1&2 (50:50) increased by $26/mt cfr, with no trades heard. 
  • Asian importers are trying to negotiate at lower bids but are expected to accept Japanese offers as indications suggest prices could stay up until January. ($1=JPY104)

 

South Korea  

  • South Korean domestic ferrous scrap prices trended flat this week. Mills kept scrap prices unchanged despite their plans to cut procurement prices due to rising Japanese and US scrap offers. 
  • The Davis Index for domestic Heavy A, Tuesday, settled flat delivered Incheon and Pohang, with major steelmakers buying domestic scrap at index price for a second consecutive week.
  • A few mills preferred lower-priced Light A scrap. The weekly Davis Index for domestic Light A settled flat delivered Pohang mill. Trades for the grade were reported at the index price. Suppliers held material expecting a price hike, while most mills shied away from high-priced imports. 
  • The weekly Davis Index for containerized HMS 1&2 (80:20), Wednesday, rose by $11/mt, with limited or no deals heard. 
  • The weekly Davis Indexes for P&S 5ft, #1 HMS, and shredded rose by $11/mt, $12/mt, and $14/mt cfr South Korea, respectively. A deal for 50,000mt Russian A3 scrap was heard.
  • South American suppliers offered HMS 1&2 (80:20) cfr South Korea on Wednesday, at prices up by $10/mt from the prior week.
  • With firm demand for billets in China, mills in Korea increased production, hoping to raise exports. Billet export offers from Southeast Asian mills rose $20/mt from the prior week cfr China, as they tried to fill in the void left by many Indian steelmakers reducing exports. 
  • Billets made through induction furnaces in Vietnam offered at $500/mt cfr Manila early in the week.
  • The HRC market has also strengthened this week supported by demand from the auto sector. Sellers offered HRC at $550/mt fob South Korea, while the Chinese mill was doling out offers at prices equivalent to $590/mt fob and rolling HRC at $610/mt fob China. Some Indian exporters were offering billets at $480/mt fob this week, with offers subsequently rising $500/mt fob. ($1=KRW1,083)

 

Taiwan  

  • The Davis Index for containerized US-origin HMS 1&2 (80:20) Thursday rose $5/mt cfr from the prior day and $8/mt from the prior week (Nov 26). A few cfr deals heard this week. Many small mills held bids lower as they felt higher offers were unviable.
  • Feng Hsin raised finished steel prices by TWD200/mt ($7/mt) on Monday. Market participants expect finished steel and ferrous scrap prices to increase further. Finished steel demand in Taiwan is stable but margins are squeezed. 
  • The weekly Davis Indexes for domestic HMS 1&2 (80:20) in South and North Taiwan Tuesday rose by TWD200/mt delivered southern and northern mill, respectively. 
  • Traders indicated that container shortage and delay in shipments have turned importers to either domestic scrap or scrap from Australia and South American yards.
  • The weekly Davis Indexes for containerized P&S 5ft, #1 HMS, shredded and #1 busheling rose by $11/mt, $10/mt, $12/mt, and $8/mt cfr, respectively. Limited deals were heard for the grades as mills avoided high offers. 
  • Offer for HMS 1&2 (80:20) in TEU from Australia and New Zealand heard at $320/mt cfr, while bids at $310-315/mt cfr. In the bulk market, offers for Japanese HMS 1&2 (50:50) rose by $10-15/mt from the week prior. ($1=TWD28)

 

China

  • In China, Shagang Steel kept finished steel and ferrous scrap prices flat on Tuesday. As per market participants, cold weather and ensuing weak steel demand might pull down prices in December.
  • The weekly Davis Index for the HMS 1&2 (80:20) settled flat delivered mill.
  • On Tuesday, prices for Q235 150mm square billets in Tangshan rose by CNY30/mt ($4.6/mt) for December deliveries. 
  • China reviewed new standards for the ‘recycled steel raw materials’ on Nov 29. Details on the standardization are expected to be issued by the end of 2020 for both domestic and import material and implemented effective Jan 1, 2021.
  • There is a lot of ambiguity among market participants around the ban of solid waste imports into China and whether ferrous scrap would be part of the same. Steel mills are waiting for further clarity on the policy.
  • A newly announced standard aims to streamline domestic scrap steel and related requirements, however, the same does not apply to the imports of high-quality recycled steel raw materials. The standard divides domestic ferrous scrap into five grades, namely heavy recycled steel materials, medium-heavy recycled steel materials, small, recycled steel materials, shredded recycled steel materials, and bundled recycled steel materials.
  • Despite lack of clarity, Chinese traders have started enquiring for US and Japanese scrap post the announcement traders said. ($1=CNY6.5)

 

Vietnam 

  • The weekly Davis Index for domestic HMS 1&2 (80:20) rose marginally by VND9,500/mt ($0.4/mt) this week delivered South Vietnam inclusive of taxes, with deals heard around the index price. The domestic steel market is gradually recovering, and mills have increased scrap purchases both from the imported and domestic markets. A rise in domestic HRC and rebar sales encouraged mills to restock ferrous scrap aggressively. 
  • In the containers market, the weekly index for US-origin HMS 1&2 (80:20) rose by $10/mt cfr. 
  • Vietnamese mills negotiated for Japan and US-origin material in bulk and stayed away from containerized scrap due to container shortage and vessel delays. In the bulk market, deals for Japanese #2 HMS heard cfr Vietnam this week. Offers were at $365/mt cfr on Thursday, but no deals heard. 
  • The weekly index for P&S 5ft and shredded rose by $9/mt and $13/mt cfr, respectively, on Thursday, amid scrap shortage and rising offers. Vietnamese mills were also inquiring for Australian-origin scrap traders said. This week, deals heard for P&S 5ft cfr with TEU offers rising $5-10/mt from the prior week.
  • Prices for #1 busheling in containers rose $10/mt cfr from a week ago and TEU offers were unacceptable for buyers. ($1=VND23,106)

 

Indonesia

  • Indonesian mills were quiet amid high US-origin offers, delay in shipments, and the approaching exporter registration deadline of Jan 1. Many yards stayed away from offering scrap to Indonesia due to the registration norm. They expect limited buying in December. 
  • The difference between offers and bids in Indonesia stayed around $10/mt cfr. The weekly Davis Index for HMS 1&2 (80:20) rose by $9/mt cfr Jakarta. 
  • The indexes for P&S 5ft and #1 HMS rose by $10/mt and $9/mt cfr Jakarta, respectively. Deals for Hong Kong origin P&S 5ft cfr heard prior Thursday, but no deal heard this week.
  • The weekly Davis Index for #1 busheling rose by $16/mt cfr. A deal for the grade from UK-yard was heard prior Wednesday. With rising offers, mills stayed away from any purchases this week. 
  • The weekly Davis Index for shredded rose by $9/mt cfr. Rising Chinese demand for billet is expected to encourage Indonesian mills to buy at higher offers for January shipments.

 

Thailand

  • The weekly Davis Index for domestic HMS 1&2 (80:20) rose by THB200/mt($6.6/mt) delivered Rayong mill inclusive of taxes amid rising demand. Deals were heard for the grade at the index price. The imported scrap market remained highly bullish and a few buyers restocked ferrous scrap. 
  • Mills preferred local scrap but cautiously purchased imported too. Domestic short supply of ferrous scrap added to the price rise this week. ($1=THB30)

 

Malaysia 

  • The weekly indexes for HMS 1&2 (80:20) fell by MYR20/mt ($4.9/mt) delivered western mills and eastern mills including taxes, respectively. 
  • A fall in global iron ore prices and weak domestic demand pulled down prices in Malaysia. Market participants said mills are cautiously about buying domestic scrap and are avoiding imports. ($1=MYR4)

 

India 

  • Imported ferrous scrap offers in India increased amid bullish global cues. Uncertainty about shipment schedules due to a lack of vessel space and shortage of material with yards due to winters has also affected trades. 
  • Some North Indian states are dealing with renewed COVID-19 restrictions along with farmer protests, which have caused transport issues. Domestic for HRC and rebar, on the other hand, rose by Rs2,000-3,000/mt within a week, which could also keep market sentiment positive.
  • The Davis Index for containerized shredded on Friday cfr Nhava Sheva, climbed by $2.23/mt from Thursday and by $15.72/mt from a week ago. There were low to no deals for shredded from the US and Europe/UK but offers on Friday were mostly above $380-385/mt cfr Nhava Sheva. 
  • The Davis Index for UAE-origin HMS 1&2 (80:20) increased by $16/mt cfr Nhava Sheva, from Nov 27. Domestic scrap remained a preferred choice for many buyers amid uncertainty in imported material deliveries. 
  • Prices for containerized Australian HMS 1&2 (80:20) cfr Chennai, were up by $16/mt from Nov 27. Suppliers from South Africa and West Africa stayed away from the market due to permit issues and restricted inflows.
  • The indexes for #1 busheling, Turning and P&S cfr Nhava Sheva, were up by $10/mt, $14/mt, and $14/mt, respectively, from the prior week.
  • High imported scrap prices pushed up domestic billet prices in India. A few mills are targeting $510-520/mt fob for billet exports to the Southeast Asian region. ($1=Rs73.97)

 

India domestic

  • The Davis Index for HMS 1&2 (80:20) rose by Rs333/mt in a day ($4.51/mt) and by Rs1,833/mt from last week del Mandi mill. 
  • India’s domestic ferrous scrap prices rose on Tuesday with indications of firm semi-finished and finished steel markets in the short term. Haryana has sealed borders to prevent the ‘Delhi Chalo’ protest by farmers from aggravating further. The rising logistic costs have impacted steel raw material prices in the region, with some reverberations across the country.
  • In Mandi Gobindgarh, the index for HMS 1&2 (80:20) was unchanged from Thursday but rose by Rs1,600/mt delivered mill from a week ago.

 

Pakistan  

  • Imported ferrous scrap bookings in Pakistan slowed as finished steel demand remains subdued. Few mills increased trades for higher grades scrap such as Busheling and P&S amid limited offers for the shredded grade.
  • The Davis Index for containerized shredded, Friday, gained $2.49/mt from Thursday and $16.25/mt from Nov 27 cfr Port Qasim. Major mills resisted paying higher due to weak steel sales despite this a few traders indicated $10-15/mt higher levels for the next week.
  • The Davis Index for UAE-origin HMS 1&2 (80:20) Friday rose $1/mt cfr Port Qasim from Thursday and by $9/mt from a week ago. Trades from Dubai thinned amid active Indian demand, but most traders held their material to make the best of the bull run. 
  • The weekly Davis Indexes for P&S and #1 busheling rose by $18/mt and $10/mt cfr Port Qasim, respectively. 
  • In the absence of South African suppliers, subcontinental buyers are competing to secure material from Australia, New Zealand, and South American sellers; with Bangladeshi buyers placing the highest bids. 
  • In the domestic market, steel prices rose incrementally each day during the week. Bala billet prices ex-works Punjab rose by PKR1,500/mt from a week ago. The Davis Index for G-60 billet ex-works Punjab increased PKR1,250/mt from Nov 27. Rebar makers too decided to pass on the increase in input costs to end-users.
  • Finished steel prices rose in Pakistan gaining support from economic packages of PKR1 trillion and PKR100bn announced in Punjab and Khyber Pakhtunkhwa, respectively, for housing and construction projects. 
  • Most mills canceled discounts on finished steel and are eyeing a price hike. The weekly Davis Index for G-60 rebar rose PKR2,250/mt ex-works Karachi and Punjab.
  • Despite rising prices, demand remains unsupportive of 100pc capacity utilization and continuous production by mills. Many mills could cut production in winter. The index for Art Q toke scrap equivalent to a mix of HMS and P&S and Pure Q Toke (shredded) jumped by PKR1250/mt ex-yard Lahore, Friday, from late last week. ($1=PKR160.4)

 

Bangladesh

  • Bangladeshi steel mills aggressively inquired for ferrous scrap amid depleting inventories and rising steel prices this week. A persisting shortage of containers and rising freight costs have incrementally raised offers.
  • The weekly Davis Index for containerized US-origin HMS 1&2 (80:20) cfr Chattogram rose $2.5/mt from Thursday and $20/mt from a week ago. The daily Davis Index for containerized shredded cfr Chattogram Friday rose $18.15/mt from the prior week and $3.47/mt from Thursday. Prices rose to highs last seen in June 2018. 
  • The weekly Davis Index for busheling cfr Chattogram Friday was up by $20/mt from the prior week. Early this week, Blue steel from Australia and the UK traded in containers, subsequently, offers from the UK yards jumped further on Friday. P&S scrap from the UK traded higher amid a shortage of shredded pushing the index up $22/mt from the prior week. 
  • High input costs lifted the weekly Davis Index for domestic billet, Friday, up by BDT2,250/mt ex-works Chattogram. Major steelmakers in Chattogram on Friday canceled discounts on most products. 
  • Many mills are facing a shortage of natural gas required for their operations.
  • The weekly Davis Index for rebar from medium-scale steelmakers settled ex-works, up BDT2,250/mt, inclusive of VAT. Large scale rebar makers like AKS and BSRM finally raised offers as high as BDT3,000/mt with the index for large steelmakers’ rebar up BDT2,500/mt from last Friday. Amid cash crunch, mills could announce production cuts to balance the supply-demand mismatch and avoid high input costs. 
  • Ship scrap equivalent to P&S rose in sync with a sharp rise in imported scrap prices. The weekly index rose BDT1,500/mt ex-yards on Friday. 
  • Offers for scrapped vessel imports rose by $20-25/mt amid delays in arrival due to seasonal concerns. Recyclers believe offers may rise to $430-440/ldt since the gap between melting and rolling scrap has narrowed from the usual $50/mt to $20-25/mt. ($1= BDT84.68)

 

Metallics

 

CIS 

  • The weekly Davis Index for CIS basic pig iron increased by $2/mt fob Black Sea basin on Friday amid new transactions and bullish global ferrous scrap and iron ore markets. 
  • Trading was active in the CIS export pig iron market at the beginning of December. A Ukrainian producer sold 50,000-55,000mt of the material to the USA at $455/mt cfr early in the week, while a Russian supplier closed a deal at $452/mt cfr New Orleans late last week. New offers from the CIS to the USA were reported at $465/mt cfr.
  • A new booking was also fixed in Turkey at a higher price after a Ukrainian exporter was heard to have sold pig iron at around $485/mt cfr compared with $475/mt cfr a week ago.
  • The weekly Davis Index for CIS pig iron in Italy rose by $6/mt cif on Friday as buyers returned to the market. Negotiations resulted in a deal at $478-480/mt cfr for approximately 5,000mt of the CIS material.

 

US

  • The weekly Davis Index for basic pig iron (BPI) surged by $26/mt cfr New Orleans port on Thursday following a second, higher-priced sale to the US from the CIS. The deal closed late last week and is scheduled for March shipment from the CIS.
  • Further offers and bids were exchanged between the CIS and the US at $455-465/mt cfr on Tuesday. The next deals are expected to close over the next two weeks, following domestic trading.
  • Price tags for metallic imports have increased by $78/mt since Nov 5 when the Davis Index recorded BPI at $378/mt cfr Nola. Domestic markets are similarly robust as December scrap trading is taking place at price levels about $50-70/gt over November settled prices, with some variation.
  • Spreads in other destinations are not as strong with the recent BPI sales to China at $434/mt cfr from Far East Russia, compared to $395/mt cfr in early November.
  • The Davis Index for nodular pig iron (NPI) imports moved up by $50/mt cfr Nola. The material remains in limited supply with few offers; however, market participants assess the price level for NPI into the US market at around $490-500/mt cfr Nola on Thursday.
  • The weekly Davis Index for US hot briquetted iron (HBI) imports corrected by $65/mt cfr Nola. US buyers mention the material has not been in demand, but the grade is projected to be priced at this level based on price trends for comparable scrap grades.

 

India

  • The index for Sponge iron settled unchanged from Thursday in Mandi Gobindgarh and Mumbai. In a week, the index rose by Rs1,700/mt del Mumbai mill and Rs450/mt del Mandi mill. 
  • The shortage of iron ore persists but is expected to ease in a month and have a bearing on Sponge iron prices. ($1=Rs73.75)

 

India semi-finished and finished steel

  • The daily Davis Index for billet in Mumbai rose Rs200/mt ($2.71/mt) from the previous Friday on elevated imported scrap prices, while the index for rebar surged by Rs1,000/mt ($13.56/mt) on sustained rebar sales.
  • In Raipur, the daily index for billet rose Rs500/mt ($6.78/mt) from the previous Friday due to high sponge prices along with good demand from outstation markets. The daily index for rebar rose Rs800/mt ($10.8/mt) despite moderate demand.
  • The daily index for ingot in Mandi Gobindgarh gained Rs900/mt ($12.2/mt) from the previous Friday with a similar increase in local scrap prices.
  • In Jalna, the bi-weekly index for billet remained unchanged on Thursday compared to the prior week amid limited buying. The bi-weekly index for rebar was marginally up by Rs100/mt ($1.35/mt).
  • The bi-weekly index for billet in Kutch rose Rs600/mt ($8.13/mt) on Thursday from last week following a rise in rebar prices. The bi-weekly index for rebar surged Rs1,000/mt ($13.56/mt).

 

Shipbreaking 

  • Shipbreaking prices trended flat to down on Friday amid slow demand from the re-rollers in Mandi Gobindgarh and Gujarat.
  • The daily Davis Index for 4ani rose Rs1,500/mt ($20.33/mt) and 8Ani rose Rs1,600/mt ($21.69/mt) from the prior week. 
  • Rolling mills in Mandi Gobindgarh, Gujarat, and western India took a breather this week having stocked scrap in November. Moderate demand for steel coupled with high offers discouraged trades indicated market participants. 
  • The daily Davis Indexes for 0.5kg plates rose by Rs1,500/mt and 5kg plates increased by Rs1,750/mt amid limited trades. Ship recyclers expect prices to rise in the coming weeks.
  • Among the other grades, the index for HMS attachments and Melting rose by Rs1,700/mt amid moderate demand for finished steel. ($1=Rs73.75)

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