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

Bangladeshi steel mills continued to book imported ferrous scrap only according to necessity.  Heavy monsoon rainfall and extension in stringent national lockdown restrictions until July 14 at the minimum, has kept most mills silent. The upcoming Eid holidays around July 21 could further slow trading. But seaborne sellers refused to lower offers as supply is tight. They expect demand to recover at the monsoon season close.  


Although mills are operating, they have kept utilization levels low as retailers and contractors are away from purchases. Most are thus low on working capital. Steelmakers also faced a margin squeeze due to low demand and firm import prices. 


The supply of melting and rolling scrap is tight in Bangladesh and the resulting rise in prices has led to a margin squeeze for mills.

The daily Davis Index for containerized shredded settled up by $2.5/mt to $551.25/mt cfr Chattogram on Thursday. Deals were scarce amid a wide disparity between offers and bids. But recovery in prices in Pakistan and resumption in Turkish bulk purchases kept offers mostly unchanged. Only a few bids were in the market at $540-545/mt cfr, which were below sellers’ expectations.


The daily Davis Index for HMS 1&2 (80:20) from Latin America, Thursday, was at $512/mt cfr Chattogram, down $2/mt. Deals for HMS 1&2 (80:20) were in the range of $510-515/mt cfr Chattogram. Sellers kept offers firm as they expect containerized freight charges to rise following the bulk rates.


In a silent market, the daily index for US-origin containerized HMS 1&2 (80:20) settled at $526.25/mt cfr Chattogram, unchanged on Thursday. The daily indexes for UK-origin and Australia-origin HMS 1&2 (80:20) were at $514/mt and $522/mt cfr Chattogram, respectively, both unchanged.


The availability of domestic ferrous scrap reduced amid the lockdown. Offers for ship scrap equivalent to P&S were at BDT49,000-49,500/mt ex-yards. For rebar, large-scale mills kept asking rates at BDT71,500-72,500/mt, ex-works. Dhaka-based mills offered discounts to boost sales as trades reported at BDT67,500-68,000/mt ex-works despite low margins.

Except for large mills, most furnaces are mulling production cuts to match the weak demand.


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