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

Imported ferrous scrap demand in India remained subdued amid the rise in new COVID-19 cases and resulting economic uncertainty. Still, offers rebounded mid-week on strong global cues and elevated container freight charges. Mills booked HMS scrap on a need basis. But fears of production cuts due to diversion of more than 80pc of oxygen production for medical use will keep mills largely silent. 


Offers for containerized shredded from the UK/EU reached $460-465/mt cfr Nhava Sheva, up by $5-7/mt from early this week. The Davis Index for containerized shredded settled at $459/mt cfr Nhava Sheva, up by $0.25/mt from a day ago, but down by $3.5/mt from last Friday. 

The daily Davis Index for UAE-origin HMS 1&2 (80:20) was at $428/cfr Nhava Sheva on Friday, up by $3/mt. Amid a drop in domestic scrap prices, Indian buyers resisted offers by Dubai suppliers. Deals for Dubai-origin HMS #1 were at $435-440/mt cfr Nhava Sheva. There is an acute shortage of domestic scrap. Should the supply tightness continue and new cases fall, demand for imported could increase again in two weeks. The government’s decision to open the vaccination drive for all age groups could improve the situation, supporting steel and raw material prices. 


The index for US-origin HMS 1&2 (80:20) Friday settled at $433.57/mt cfr Nhava Sheva, up by $3.57/mt from a day prior. Suppliers from UK and Australia were bullish amid improved demand in Bangladesh and a few trades in India. 

On Friday, offers for turning scrap were above $405/mt cfr Nhava Sheva and $410-415/mt cfr Chennai, up by $5-10/mt from a week ago. Offers for West African HMS were $410-415/mt cfr Chennai on increased freight rates and inquiries. Australian origin HMS #1 traded at $450/mt cfr Chennai. 


Offers for busheling in containers were in the range of $500-505/mt cfr Vizag. Mills stayed away from booking containerized P&S and #1 busheling amid domestic volatility. The indexes for P&S and #1 busheling were at $471/mt and $489/mt cfr Nhava Sheva, respectively, both up by $4/mt from last week.


On Friday, melting scrap offers in Alang rose by Rs700/mt to Rs36,300/mt ex-yards. From last Friday, Alang heavy melt scrap prices were higher by Rs500/mt. Many yards have been forced to shut operations on oxygen shortage, and recycling activity at Alang is gradually coming to a standstill. Despite lowered generation, production halts at various plants could balance the supply-demand equation, keeping prices flat or rangebound. 


In Mumbai, rebar prices were unchanged on Friday. Rebar prices were unchanged for the second day at Rs49,300/mt ex-works Mumbai, with the index for HMS 1&2 (80:20) also settling flat at Rs31,000/mt delivered mill. Stricter movement curbs to contain the virus in the state has impacted inter districts transport and the availability of laborers. Construction work has slowed, hurting rebar sales and thereby scrap consumption.


In China, spot iron ore prices dropped by over 2.5pc after hitting a 10-year high to $185/mt cfr North China for 62pc Fe scrap content on Friday. Fresh tensions between Australia and China about belt and road initiative could impact iron ore trades. Sentiment in the China steel market has also weakened. Stricter emissions restrictions were introduced in the Chinese steel hub of Handan city.



The daily Davis Index for containerized shredded Friday settled at $461.91/mt cfr Indian subcontinent, up by $8.60/mt from a day prior; while that for containerized US-origin HMS 1&2 (80:20) was at $439.61/mt cfr Indian subcontinent, up by $10.42/mt from prior Friday. 



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