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

Bangladesh’s ferrous scrap market witnessed only containerised trades as major mills have refused bulk trades and are waiting for a price correction. Domestic demand remained subdued as most steelmakers are struggling with cash flow crunch. Transportation activities were disturbed due to heavy rains and floods in the outskirts of Dhaka.


The Davis Index for containerized shredded, Friday, settled at $326.5/mt cfr Chattogram, stable from Thursday, but down by $5.5/mt from the prior week. Several trades for containerised shredded scrap from Europe reported in the range $330-332/mt cfr Chattogram subsequently dropped in the $325-328/mt cfr Chattogram range later in the week. A few buyers concluded shredded from Australia and New Zealand at $320-325/mt cfr Chattgram.  


On Friday, offers for containerized shredded from the UK were heard at $330/mt cfr Chattogram against firm bids of $323-325/mt cfr Chattogram. Most infrastructure projects have resumed, and demand is expected to shoot in the coming weeks. Major mills have turned 90-100pc operational, which could see demand for ferrous scrap recover.


In the bulk market, mix HMS 1&2 (80:20) and shredded are being offered at $325-330/mt cfr Chattogram pulling offers to $320/mt cfr Kandla on Friday.  

A sharp rise in bulk offers from Japan following the conclusion of Kanto tender led to a sudden rollback of buying interest from Bangladeshi buyers. H2 offers at $310-315/mt cfr Chattogram have turned non-viable. Mills are unlikely to book Japanese scrap when the US bulk offers are available in the range $325-330/mt cfr Chattogram.  


The index for US-origin HMS 1&2 (80:20) was at $310/mt cfr Chattogram, down by $13/mt from prior Friday. Despite strong offers from yards amid short supply, importers were not in a position to pay more. Trades for HMS 1&2 (80:20) were reported at $310-313/mt cfr Chattogram, while weekend buyers pulled bids down to $308-310/mt cfr Chattogram against offers of $320-325/mt cfr Chattogram. Prolonged situation of weak demand in Bangladesh could force suppliers to lower their offers to match buyer’s expectation in the coming week.  


The index for UK/EU-origin HMS 1&2 (80:20) dropped by $3.75/mt to $305/mt cfr Chattogram from the prior week. A few sellers offered HMS 1&2 (80:20) at $310/mt cfr Chattogram, while bids were still at $300-305/mt cfr Chattogram on Friday. The Davis Index for Australian HMS 1&2 (80:20) settled at $305/mt cfr Chattogram, down by $9.29/mt from the prior-week. Dhaka-based mills were reluctant to book material as operations of major mills were suspended after heavy rains and flood disturbed transport.

Indian sponge iron offers continued to remain high amid a short supply of iron ore in India. Small mills in Bangladesh preferred domestic scrap over sponge iron to reduce input costs.  


The index for Latin American-origin HMS 1&2 (80:20) settled at $300/mt cfr Chattogram Friday, down by $10/mt from a wee-prior. A few containers traded at $300-305/mt cfr Chattogram, while #1 HMS traded at $310-312/mt cfr Chattogram. Brazilian suppliers offered very limited materials due to a stronger domestic market.  


The Davis Index for busheling settled at $343/mt cfr Chattogram, down by $5/mt from the prior week. P&S from South America and Australia traded at $325-328/mt cfr Chattogram. The weekly index for the grade settled at $326/mt cfr, down by $4/mt. Trades for higher grade scrap were subdued amid limited buying interest.   


Finished, semi-finished steel

Domestic steel demand in Bangladesh is still far from normal. Only branded rebar suppliers were able to afford imported scrap. Almost 60pc of the steel mills in Dhaka are on the verge of shutting down as they are unable to sell rebar at a profit. GPH Ispat seemed as a potential buyer, restocking ferrous scrap ahead of the commissioning of its rebar plant in December.  

The weekly index for domestic billet Friday settled unchanged at BDT41,000/mt ($483.3/mt) ex-works Chattogram. Several trades were reported at the index price. Rebar demand could take longer to recover to pre-COVID-19 levels.


Major steelmakers in Chattogram are offering discounts to push sales. Most small and medium scale steelmakers in Dhaka expect prices to improve in the coming days with increasing infra projects. Large steelmakers in the country sold rebar at BDT55,300-55,500/mt ex-Chattogram, pushing the index up BDT318/mt from the prior week. Despite high imported scrap offers, mills had to liquidate their finished steel inventories at discounted rates to generate cash flow, said steelmaker.  

The weekly Davis Index for rebar from medium steelmakers settled at BDT50,250/mt ex-works, down by BDT250/mt from the prior week, inclusive of VAT. Rebar by small-scale producers traded at BDT49,000/mt ex-works, flat from the prior week.


Domestic and shipbreaking scrap

In the shipbreaking market, Bangladeshi recyclers held offers stable at $360-370/ldt cfr Chattogram from the prior week.  

Domestic shipbreaking scrap equivalent to P&S traded at BDT30,600-30,800/mt delivered mill on Friday, up BDT300/mt from the prior week. HMS 1&2 (80:20) was at BDT28,800-29,200/mt ex-Chattogram. The weekly index for HMS 1&2 (80:20) settled at BDT28,936/mt ex- Bangladesh yard, down BDT189/mt, inclusive of local taxes.  





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