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

Bangladeshi steel mills aggressively inquired for ferrous scrap amid depleting inventories and rising steel prices. A persisting shortage of containers and rising freight costs have incrementally raised offers. Improving steel demand in the country could support scrap trade. Most suppliers, however, are away from the market ahead of winter break or on expectations of higher prices.


In the bulk markets, prices for US West Coast-origin HMS 1&2 (80:20) heard above $390-400/mt cfr Chattogram with no firm offers despite rising buying interest. Japanese #2 HMS offered as high as $370-380/mt cfr Chattogram with no major deals.


The weekly Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $385/mt cfr Chattogram, up by $2.5/mt from Thursday and up $20/mt from a week ago. Very few offers were at $380-385/mt cfr Chattogram from Australia and the US, differing by quality. Some mills are avoiding imports from the US and UK due to delays in shipment amid tight vessel space. In a deal, 500mt #1 HMS sheared from the UK traded at $402/mt cfr Chattogram.


The daily index for Latin America-origin HMS 1&2 (80:20) settled at $374/mt cfr Chattogram up by $1/mt from Thursday and gaining $11/mt from Nov 27. Offers for Latin American mix HMS #1 and P&S rose to $380-385/mt cfr Chattogram, while a few containers were booked for the grade at $375-380/mt cfr Chattogram from Australia, New Zealand and Chile-origin. Domestic markets in Latin America are firming up amid a recovery in steel demand, which is cutting down offers for Asian countries.


The daily Davis Index for containerized shredded, Friday, settled at $403.86/mt cfr Chattogram, up by $18.15/mt from prior Friday and $3.47/mt from Thursday. Prices rose to highs last seen in June 2018. Earlier this week, UK-origin shredded in containers traded at $400-405/mt cfr Chattogram. Bids for shredded from the US, New Zealand and Australian-origin heard at around $400/mt cfr Chattogram.  


The weekly Davis Index for busheling, Friday, settled at $420/mt cfr Chattogram up by $20/mt from the prior week. Early this week, Blue steel from Australia and the UK traded at $410-415/mt cfr Chattogram, subsequently, offers from the UK yards were at $420-425/mt cfr Chattogram on Friday. P&S scrap from the UK traded at above $410-415/mt cfr Chattogram with the index rising $22/mt from the prior week. P&S from Australia jumped above $395-400/mt cfr Chattogram.


Billets prices soar

High input costs lifted the weekly Davis Index for domestic billet, Friday, up by BDT2,250/mt to BDT48,750/mt ($576/mt) ex-works Chattogram with trades at the index price. Major steelmakers in Chattogram on Friday offered domestic billet at BDT49,000-49,500/mt ex-works as steelmakers cancelled discounts on most products. Many mills are facing a shortage of natural gas required for their operations.


The weekly Davis Index for rebar from medium-scale steelmakers settled at BDT56,750/mt ex-works, up BDT2,250/mt, inclusive of VAT. Large scale rebar makers like AKS and BSRM finally raised their prices to BDT59,500-60,000/mt ex-works to speed up sales amid weak demand. The index for large steelmakers’ rebar rose BDT2,500/mt from last Friday to BDT59,500/mt ex-works. Small scale rebar makers offered rebars at BDT53,000-53,500/mt ex-works on subdued infra projects in the rural areas. Amid cash crunch, mills could announce production cuts to balance the supply-demand mismatch and avoid high input costs.  


Domestic and shipbreaking scrap

Ship scrap equivalent to P&S rose in sync with a sharp rise in imported scrap prices. The weekly index rose BDT1,500/mt to BDT38,125/mt ex-yards on Friday. 


HMS 1&2 (80:20) was priced at BDT36,500-37,000/mt ex-yards Chattogram. The weekly Davis Index for the grade settled at BDT36,500/mt ex-yards on Friday, up BDT1,500/mt. 


Offers for scrapped vessel imports rose above $400-420/ldt amid delays in arrival due to seasonal concerns. Recyclers believe offers may rise to $430-440/ldt, since the gap between melting and rolling scrap has narrowed from the usual $50/mt to $20-25/mt.  


($1= BDT84.68)


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