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

Bangladeshi mills have turned cautious of fresh imported scrap booking for January end or February shipments as they doubt if steel demand will sustain at higher prices. Amid incremental increases in scrap offers, many small-scale mills plan to stop purchases and also halt productions as they face a cash crunch. 


Rising containerised scrap offers shifted mills’ focus back to bulk cargoes. Buyers sought offers from the US, Australia and Japan. However, there were hardly any offers that matched buyer’s bids.


The daily Davis Index for containerized shredded, Monday, settled at $433.75/mt cfr Chattogram, up by $7.79/mt from Friday. Offers have gone above viable levels for all medium and small-scale producers in the country. Despite improved profit margins, mills will have to stay away from the market. The Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $416.07/mt cfr Chattogram, up by $10/mt from Friday. Very few offers heard at $415-420/mt cfr Chattogram from Australia and the US, differing by quality. 


The daily index for Latin America-origin HMS 1&2 (80:20) settled at $413/mt cfr Chattogram up by $12/mt from Friday. Offers for Latin American mix HMS #1 and P&S rose to $410-420/mt cfr Chattogram, while a few containers booked at $410/mt cfr Chattogram from Australia, New Zealand and Chile. 


P&S scrap from the UK heard above $435/mt cfr Chattogram and at $425/mt cfr Nhava Sheva and Qasim on Monday, however, there were no buyers in the market


Domestic steel prices pause

Despite high input costs, steel prices paused their rally after rising sharply by BDT4,000-5,000/mt in the last two weeks. On Monday, large scale rebar makers like AKS and BSRM kept their asking prices flat at BDT61,000-62,000/mt ex-works. But a few medium-scale rebar makers offered discounts of BDT1,500-2,000/mt to encourage trades. Winter season issues like heavy fog are likely to impact transportation. 


Medium-scale rebar makers are offering rebar at BDT55,000-56,000/mt ex-works on Monday. Amid cash crunch, mills have decided to go for production cuts to balance the supply-demand mismatch and avoid high input costs. Some mills might resume operations in mid-January. 


Steel mills in Chattogram, Monday, offered domestic billets at BDT49,500-50,000/mt ($585-591/mt) ex-works Chattogram unchanged from Wednesday. 


Shipbreaking scrap equivalent to P&S was stable on Monday. Trades were heard at BDT38,500-39,500/mt ex-yards. With easing scrapped vessel supplies, some yards offered domestic scrap at BDT38,000-38,500/mt ex-yards on Monday. Shipbreaking offers for scrapped vessel imports heard above $430-450/ldt, however, many yards have orders in hand and arrivals in January could keep buying interest slower than last two weeks.


($1= BDT84.79)

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