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

Imported ferrous scrap prices were mixed in Pakistan and Bangladesh on Monday as buyers stuck to the ‘wait and watch’ approach. Most participants await a price correction over the week. Mills booked limited quantities of scrap at lower prices as the trend remains ‘soft’, while Internationally, dockside prices remained high and firm. The possibility of a price increase in the EU/the US domestic markets in October holds back suppliers from offering much at lower prices. 


Weak finished steel demand in Pakistan and heavy floods in most steel manufacturing regions in Bangladesh also restricted trades in both countries. 



Bangladeshi importers actively traded in the containerised scrap market on Monday. A major mill negotiated a bulk deal late last week, heard Davis Index, however, details of the deal are yet to be confirmed. The Davis Index for containerized shredded Monday was at $326.56/mt cfr Chattogram, up $0.06/mt from Friday. The price sentiments remained mixed. A few deals for shredded from Australia and New Zealand concluded at $325-328/mt cfr Chattgram. 


Domestic demand remains subdued in Bangladesh and most steelmakers are struggling with cash flow crunch. Transportation activities were disturbed due to heavy rains and floods in the outskirts of Dhaka. Steel mills were under pressure to liquidate their finished steel inventories at a discount which has kept domestic steel prices lower despite recovering demand.


In the bulk market, US West Coast suppliers offered HMS 1&2 (80:20) at $325/mt cfr Chattogram, $10/mt lower than the prior week, with a further possibility of downward movement. 


The index for US-origin HMS 1&2 (80:20) Monday settled at $310.57/mt cfr Chattogram, up $0.57/mt from Friday. Sellers offered HMS 1&2 (80:20) at $315-320/mt cfr Chattogram, while bids were at $308-310/mt cfr Chattogram.


The index for Latin America-origin HMS 1&2 (80:20) settled at $300/mt cfr Chattogram, flat from Friday. Most 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. 


Limited supply kept Bangladeshi domestic ferrous scrap prices stable after rising. Shipbreaking scrap equivalent to P&S was offered at BDT31,000-31,500/mt del mill from a week earlier, while HMS 1&2 (80:20) traded at BDT29,000/mt ex-Chattogram, flat from Friday. 


Billet offers were stable at BDT41,000/mt ex-works, range-bound for the past few weeks.


Amid weak domestic demand, most steelmakers expect steel prices to drop further in the coming days. Small scale producers offered rebar at BDT49,000-49,500/mt ex-works while medium-scale mills sold rebar at BDT50,000-50,500/mt ex-yards. 



Imported scrap prices rose in Pakistan due to a shortage in domestic scrap. Limited supply encouraged traders to book imported scrap in containers. The possibility of dumping of finished steel from China at lower prices brought sentiments down further and buyers prefer not to book more materials to avoid risks. Also, the country’s National Tariff Commission (NTC) has proposed a reduction in tariff on imports of finished and semi-finished steel products. 


The Davis Index for containerized shredded on Monday settled at $316.43/mt cfr Port Qasim, down $1.07/mt from Friday. A few containerised deals of 500mt concluded late last week at $313-315/mt cfr Qasim, however, most yards still offer shredded at $320/mt cfr Qasim amid short supply. The disparity between bids and offers resulted in limited trades on Monday.


The Davis Index for UAE-origin HMS 1&2 (80:20) settled at $300/mt cfr Port Qasim, unchanged from Friday. Buyers lowered bids for HMS scrap, in line with shredded scrap prices, to $295-300/mt cfr Qasim. Trades for UAE-origin mixed #1 HMS and P&S sarya scrap reported at $305-310/mt cfr Port Qasim. Buyers continued to prefer UAE-origin scrap due to shorter delivery times, while some decided to wait for clarity on prices in the coming days. 


The index for US-origin HMS 1&2 (80:20) settled at $297.75/mt cfr Port Qasim, up $2.32/mt. Prices increased marginally from last week as suppliers refused to accept low priced bids. Offers were at $300-305/mt cfr Qasim on Monday while bids were upto $295/mt cfr Qasim.


In the domestic market, Bala billet prices remained flat Monday amid thin trades. Prices were at PKR91,000-91,500/mt ex-works Punjab. Domestic Pure Q toke scrap equivalent to shredded traded at PKR71,000-71,500/mt ex-works Lahore adjusting marginally after a sharp rise last week. Buyers delayed deal due to a cash crunch. Limited economic activities and rains impacted trades in the country. 


Rebar trades concluded at discounted levels around index prices against offers of PKR110,000/mt ex-works Karachi this week. The weekly Davis Index for G-60 rebar settled flat Friday at PKR108,500/mt ($652.5/mt) ex-works Karachi from the prior week. Finished steel prices in Southern Pakistan were under pressure as leading steelmakers offered discounts to liquidate inventories. 



The daily index for US-origin containerized HMS 1&2 (80:20) Monday settled flat at $278/mt cfr Taiwan. Steel mills forecast a ‘soft trend’ for the coming week amid limited buying and sluggish steel demand. Bids for the same grade was to $275-278/mt cfr Taiwan. 


In Turkey, the index for US-origin HMS 1&2 (80:20) in bulk declined by $3.25/mt to $297/mt cfr Turkey on Friday. Turkish mills have started targeting $293-295/mt cfr Turkey for US-origin HMS 1&2 (80:20) while offering rebar in the US market at marginally lowered prices as buyers refused earlier price levels. 


South Asian buyers expect lower scrap prices in the coming days. Following global cues, Taiwanese mills held their scrap purchases prices led by Feng Hsin Steel which kept its domestic scrap purchase prices unchanged on Monday.


Depreciation of the Taiwanese dollar against the US dollar could limit imports. Mills are likely to focus on steel exports over this week, said a trader. Taiwanese dollar stands at 28.99 against the US dollar, down from 29.3 a week earlier  


($1= PKR165.55; BDT84.67; NT$28.99)

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