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

Imported ferrous scrap bookings slowed due to a disparity between offers and bids. Most mills are waiting for Turkey to book scrap for March shipment and offer clarity in the price direction. Domestic billet and rebar prices dropped for a second successive week pressured by low demand. Some mills continued to face a cash crunch. Many sellers and buyers await their GST refunds and have urged the government to expedite the process. 


Seasonally, scrap bookings in mid -January are known to dip. Market activity is subdued ahead of Pongal festivities in South Indian states and Makar Sankranti in Maharashtra and Gujarat. A cold wave and the resulting smog in North India has impacted transportation. 


The Davis Index for containerized shredded, Tuesday, settled at $491/mt cfr Nhava Sheva up by $0.37/mt from Monday. Buyers were unwilling to book large volumes. Bids were around $15-20/mt. Shredded prices have remained unviable for Indian mills as domestic steel prices lost steam. 


The landed cost for imported HMS 1&2 (80:20) at $430/mt cfr Nhava Sheva comes to Rs32,000-32,500/mt delivered Mumbai mill, including import duties, freight, and port handling charges. Domestic HMS 1&2 (80:20)prices are at around Rs30,000/mt delivered Mumbai mill. Mills thus preferred domestic material over imports. The depreciation of the Indian currency to Rs73.5 against $1 from Rs73 on Monday, impacted buying interest. 

Dubai sellers accepted only a few bids which they believed were workable. The Davis Index for UAE-origin HMS 1&2 (80:20), Tuesday, was at $443/cfr Nhava Sheva, down by $2/mt from Monday. Some suppliers offered #1 HMS at $450-455/mt cfr Nhava Sheva, but bids were at $435-440/mt cfr Nhava Sheva.


Indian ferrous scrap market was not in sync with the international market. Domestic ferrous scrap availability has eased. Thus, Indian buyers were unwilling to raise bids, discouraging most sellers. The price decline in the Indian domestic steel market could be temporary. With low inventories in hand, steel end-users could resume purchases and give prices a lift, believe traders. 

The impact of lockdown in the Hebei province and cold weather impacted Chinese steel futures and spot trades. Bids from Southeast Asian billet makers were at $600/mt cfr Manila, Philippines. On Tuesday, Q235 150mm square billets prices in China were unchanged at CNY3,810/mt ex-works Tangshan including 13pc VAT. 



The Davis Index for containerized shredded, Tuesday, settled at $491.35/mt cfr India subcontinent, up by $1.33/mt from Monday. The index for containerized US-origin HMS 1&2 (80:20) settled at $449.88/mt cfr India subcontinent, down by $1.00/mt. International freight rates have increased by $10/mt at the minimum on all South Asian routes as container shortage persists. 


($1=Rs73.5, CNY6.46)


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