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

Imported ferrous scrap trades in Bangladesh continued, albeit, for immediate melt requirements. Bangladesh has extended the COVID-19 related lockdown till May 5 amid rising COVID-19 infections. Production activities at large steelmakers continued despite the limited availability of labourers and disruption of logistics. 


A few large mills with low inventories actively inquired for scrap anticipating tight availability in May. Post Eid purchases in Turkey, Pakistan, India and Indonesia are expected to elevate offers in the coming days. While robust steel demand in China could also support higher prices.


The daily Davis Index for containerized shredded, Thursday, settled at $490/mt cfr Chattogram up $7.5/mt from prior Friday. UK-origin containerized shredded traded at index prices, while offers rose to above $490-495/mt cfr Chattogram.


The uptrend in the offers continued as traders could not find low-priced material from suppliers with most of the high seas scrap already sold.


Production at large mills has remained unimpacted by lockdowns. They are operating at full capacity with onsite worker accommodations and COVID-19 precautions. While small to medium scale mills have cut production to match weak steel demand and the upcoming monsoon lull. 


In small bulk, Japanese exporters targeted #2 HMS at $485-490/mt cfr Chattogram while offers for Busheling heard above $530-535/mt cfr Chattogram. For shipbreakers, offers for scrapped vessels jumped above $520-525/ldt this week, with buyers refusing to accept levels above $500/ldt. 


The index for HMS 1&2 (80:20) from Latin America settled at $467/mt cfr Chattogram up $4/mt from prior Friday. Most Latin American yards target to sell HMS 1&2 (80:20) at $470-475/mt cfr Chattogram on higher freight charges. 


The daily indexes for US-origin, UK-origin, and Australia-origin containerized HMS 1&2 (80:20) moved up to $468.5/mt, $466/mt, and $473/mt cfr Chattogram, up by $3.5/mt, $6/mt and $5/mt from prior Friday. UK origin HMS offers recorded faster growth over other origins following the depreciation of the US dollar against the British pound. 


Demand for high-grade scrap improved as the severity of chip shortages increased and global automakers are staring at shutdowns. Offers for premium scrap grades like P&S and Busheling moved up by $10/mt on limited supply. Lower industrial generation due to the shutdown of auto plants has disrupted the supply of premium grades. The Davis indexes for P&S and #1 Busheling, Thursday, rose to $495/mt and $517/mt, up $2/mt and $7/mt, respectively, from the prior Friday. 


Domestic steel prices flat 

Domestic steel prices expected to drop due to the impact of the extended lockdown on new orders. However, high input costs held steel prices firm. Monsoon season will begin soon after Eid, a time when construction activities take a backseat, so overall demand is expected to be slower resulting in tepid demand from Bangladeshi mills, traders noted. 


The weekly index for ship scrap equivalent to P&S rose by BDT1,000/mt to BDT47,500/mt ex-yards on Thursday. The index for domestic HMS 1&2 (80:20) was at BDT45,750/mt ex-yard Chattogram, up BDT250/mt. Trades for 16mm ship plates were at BDT54,500-55,000/mt ex-yards.


The weekly index for billet was at BDT60,750/mt ex-works, up BDT250/mt from the prior Friday. Domestic billet offers remained stable amid high input costs at BDT61,000-61,500/mt ex-works Chattogram despite limited trades. Small and medium-scale steelmakers opted to sell rebars over billet due to better margins.


Recyclers stayed away from high offers which affected the generation of ship scrap, operations slowed sharply amid high offers and an extended lockdown.


Large steelmakers like AKS, GPH and BSRM held their offers above BDT70,000-71,000/mt ex-works, stable as they continued to operate at near to full capacity after managing their worker’s accommodation and health safety.


The index for rebar from medium-scale mills in Dhaka rose by BDT500/mt to BDT67,000/mt ex-works. A few Dhaka-based steel mills raised offers to BDT67,500-68,000/mt ex-works to sync their price with large steelmaker’s offers.


Unable to manage their operations at full scale amid financial challenges and labour shortage, small scale steelmakers halted productions.



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