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

Ferrous scrap importers reported limited trades on Thursday amid indications of prices softening in the global markets. In Pakistan and Bangladesh, steel mills now expect prices to drop further as they continue to struggle with weak domestic steel demand. 


In Turkey, US-origin HMS 1&2 (80:20) bulk prices dropped around $295/mt cfr Turkey, down $5/mt from last week in absence of trades. Bids for Baltic origin HMS (80:20) in bulk cargoes were reported at $290/mt cfr Turkey, Thursday.  



Imported scrap prices continued to drop in Pakistan as billet prices are on a downtrend. Suppliers were looking to sell off shredded and HMS before prices drop further. Domestic demand remains weak while many mills kept prices high post-COVID-19, causing domestic steel prices to drop further. These prices are now adjusting with rising steel supply, said a steelmaker.  

Also, the possibility of dumping finished flat steel, especially HRC, from China at lower prices has hurt the market sentiment and buyers stayed away from bookings to limit risk.    


The Davis Index for containerized shredded, Thursday, settled at $310/mt cfr Port Qasim, down $2.29/mt from Wednesday. A few containerized deals of shredded scrap were reported at $310-312/mt cfr Qasim, though most yards have revoked offers citing these low levels to be non-workable amid short supply. The disparity between bids and offers resulted in limited trades. Mills were making every attempt to find lower-priced containers, especially in their bid range of $305-307/mt cfr Qasim on Thursday. 


The Davis Index for UAE-origin HMS 1&2 (80:20) settled flat at $295/mt cfr Port Qasim. Buyers lowered bids for HMS scrap, in line with falling shredded scrap prices in the range $290-295/mt cfr Port Qasim, and these levels could materialize into trades now. Trades for UAE-origin mixed #1 HMS and P&S sarya scrap were reported at $300-305/mt cfr Port Qasim. GI scrap bundles traded at $310-315/mt cfr Qasim.


The index for US-origin HMS 1&2 (80:20) settled at $295.86/mt cfr Port Qasim, down $1.14/mt. Most US-based yards were unwilling to offer large volumes citing expectations of a stronger market in October. Offers were at $300/mt cfr Qasim against bids from mills of $290/mt cfr Qasim.

In the domestic market, Bala billet prices dropped another PKR300-500/mt in the last couple of days. Prices were at PKR90,700-90,800/mt ex-works Punjab on Thursday. Domestic Pure Q toke scrap equivalent to shredded traded at PKR70,500-71,000/mt ex-works Lahore, down PKR200-500/mt from early this week. Weakened demand for finished steel and slower recovery in infrastructure projects prevented domestic prices from recovering sharply.  


Major mills were under pressure to liquidate their inventories and offered a huge discount on rebar prices. Trades for rebar were reported at PKR109,000-110,000/mt ex-works Karachi this week. Finished steel prices in Southern Pakistan were under pressure as leading steelmakers offered discounts to liquidate inventories.  



Bangladeshi mills were silent amid declining market for containers. A few mills lowered bids further on Thursday, following global cues and have sought the government’s help to overcome the losses during the pandemic.  


The daily Davis Index for containerized shredded, Thursday, was at $323.29/mt cfr Chattogram, down $0.88/mt from Wednesday. The prices remained under pressure as buyers have stayed away for more than a month. A few deals for shredded from Australia and New Zealand concluded at $320-322/mt cfr Chattogram against offers of $325/mt cfr early this week.

P&S scrap was offered at $315-320/mt cfr Chattogram on Thursday, against bids of $310/mt cfr Chattogram from an EAF steelmaker. Bangladeshi steel mills are expected to stay away from the markets.  


In the bulk market, US West Coast suppliers offered HMS 1&2 (80:20) at $325/mt cfr Chattogram, flat over the week and no major trades were reported. The index for US-origin HMS 1&2 (80:20) in containers settled at $306.43/mt cfr Chattogram, down $2.32/mt from Wednesday. Sellers offered HMS 1&2 (80:20) at $310-315/mt cfr Chattogram, while bids were not over $305/mt cfr Chattogram on Thursday. Major mills still have enough inventories in hands to fulfill their orders in hand and appetite for imported scrap could remain weak till November, said a trader.


The index for Latin America-origin HMS 1&2 (80:20) settled at $301/mt cfr Chattogram, down $2/mt from Tuesday. Most Brazilian traders sought HMS 1&2 (80:20) at $305-310/mt cfr Chattogram while offers remained scarce. Brazilian yards offered #1 HMS at $310-315/mt cfr Chattogram to direct mills on Wednesday while mills booked the grade only in the range $305-307/mt cfr Chattogram. Small-scale furnaces were targeting Indian sponge and imported HMS scrap prices in the range $290-295/mt cfr Chattogram as viable.  

The limited supply kept Bangladeshi domestic ferrous scrap prices stable. Shipbreaking scrap equivalent to P&S was offered at BDT30,500/mt del mill, down BDT500/mt from a week earlier, while HMS 1&2 (80:20) traded at BDT28,500-29,000/mt ex-Chattogram. Heavy floods in and around Dhaka kept mills away from trades.  


Domestic small and medium scale mills expect a drop in billet prices by BDT1000-1500/mt in the coming days after remaining flat for over a month. The domestic billet was traded flat at BDT41,000/mt ex-works on Thursday on limited cash flow. Small-scale producers offered rebar at BDT49,000-49,500/mt ex-works while medium-scale mills sold rebar at BDT50,000/mt ex-yards. 


($1= PKR166.32; BDT84.8)



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