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

Imported ferrous scrap prices in South Asia dropped further on Thursday as sellers lowered offers amid low demand. Most buyers were resisting trades at previous price levels since downstream demand is yet to pick up. 


The supply crunch has started to ease with improved collection rates, and tonnage offered in the market has increased. Pakistan and India adopted a wait-and-watch approach with prices in Turkey softening. A few traders believed some buyers are trying to pull the prices down artificially. However, even at the decreased prices, trades were thin. 

In Turkey, US-origin HMS 1&2 (80:20) bulk prices dropped by $1.25/mt to $282.5/mt cfr Turkey due to lack of trades. Finished steel demand too remained limited.  


There was a mismatch between bids and offers on Thursday. Though Bangladeshi mills have increased their inquiries, only a few trades materialized. The impact of heavy rains and flood has subsided, and production activity is now expected to pick up gradually.


The Davis Index for containerized shredded settled at $318/mt cfr Chattogram, down by $1.64/mt from Wednesday. Despite offers for shredded from UK yards at $325-330/mt cfr Chattogram, most buyers were unwilling to go over $315/mt cfr Chattogram. Supply from Australia and New Zealand has started to thin late last week, offers were close to nil. Most Dhaka-based mills thus raised inquiries for South American containerized scrap while a few even preferred to book Indian sponge iron offered at $260-270/mt cfr Chattogram.  


The index for Latin America-origin HMS 1&2 (80:20) settled at $300/mt cfr Chattogram, down by $1.07/mt from Wednesday. A few containerized trades concluded at the index price. Offers for #1 HMS from Brazil, Chile, and Europe were at $300-303/mt cfr Chattogram, with bids at $295/mt cfr Chattogram from small scale furnaces. 


The index for US-origin HMS 1&2 (80:20) was at $304/mt cfr Chattogram, down by $2.25/mt from Wednesday. Sellers offered HMS 1&2 (80:20) no $305-310/mt cfr Chattogram, while buyers were looking at $300/mt cfr Chattogram with no sellers at those levels. Most suppliers believe prices are unlikely to register a steep decline, cushioned by bullish Japanese export prices on the back of a rise in average bids at the Kanto tender bids. 


In the domestic market, steel prices dropped by BDT1,000-1,500/mt from the early week. Trades for HMS 1&2 (80:20) and shipbreaking scrap were at BDT29,000-29,500/mt inclusive of local taxes, ex-yards Chattogram, down by BDT1500/mt from Monday. Rebar prices from medium steelmakers dropped by BDT1,000-1,500/mt from the prior Friday to BDT51,000-51,500/mt ex-plant. Domestic billets traded at BDT42,000/mt ex-works Chattogram. 



Pakistani ferrous scrap importers booked limited volumes for imported scrap just to fulfil their minimum requirements. Most opted for lower-priced material since domestic steel demand remains subdued due to cash constraints. The Pakistani currency Rupee also depreciated hitting market sentiment. 


The Davis Index for containerized shredded settled at $309/mt cfr Port Qasim, down by $1.78/mt from Wednesday. Trades for the US and Europe-origin shredded were at $307-308/mt cfr Port Qasim. Offers from UK yards for the grade were at $312-315//mt cfr Port Qasim on Thursday. Steel mills in Karachi, however, were unwilling to pay beyond $305/mt cfr Port Qasim for shredded.

The domestic market also softened in line with the downtrend in the global scrap market. Bala billet prices dropped in the range PKR91,500-92,000/mt ex-works Punjab and shredded scrap Q toke traded at PKR72,300-72,500/mt ex- yards Lahore.


The Davis Index for HMS 1&2 (80:20) of UAE-origin Thursday settled at $298.57/mt cfr Port Qasim, down by $1.43/mt from Wednesday. Offers for UAE-origin mixed #1 HMS and P&S were at $300-305/mt cfr Port Qasim on Thursday. Most UAE suppliers have managed to stay in the market despite an official ban on exports. 


The index for US-origin HMS 1&2 (80:20) settled at $295/mt cfr Port Qasim, down by $1.25/mt from Wednesday. Most US yards offered material at $295-300/mt cfr Port Qasim. A few trades were reported at $295/mt cfr Port Qasim Thursday. Bids subsequently dropped to $290/mt cfr Port Qasim. 


($1= PKR168.69; BDT84.84)


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