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

Bangladeshi steel mills stayed away from containerized ferrous scrap bookings expecting prices to fall in the coming days amid easing supplies in the global market. Leading mills booked large tonnages in bulk cargoes for February deliveries in the first half of January, while others in Dhaka opted for competitively priced domestic scrap and Sponge iron imports from India.  


The daily Davis Index for containerized shredded, Friday, settled at $500/mt cfr Chattogram, down by $0.5/mt from Thursday, while up $3.21/mt from the prior week. Buyers were silent on Friday as anticipation of a downside stopped them from booking more scrap. Mills targeted offers lower than $495-500/mt cfr Chattogram amid a dip in domestic steel prices this week. Many believe prices could rise again as the domestic markets in the US and Europe are bullish for scrap while generation and collection is hampered, especially in Europe due to COVID-19-related lockdown.  


Trades in containerized P&S and busheling has slowed amid a lack of buyers for these grades. Indexes for the grades settled at $494/mt and $509/mt cfr Chattogram, down $4/mt and $1/mt, respectively. Australian HMS 1&2 (90:10) in containers offered at $475-480/mt cfr Chattogram. Against offers of the UK-origin HMS 1&2 (80:20) at $480-485/mt cfr, bids lagged at $465-475/mt cfr Chattogram on Friday. HMS 1&2 (90:10) in containers offered at $480/mt cfr Chattogram against bids of $465-470/mt cfr.  


The Davis Index for containerized HMS 1&2 (80:20) of the US-origin and Latin America-origin settled at $477.5/mt and $475/mt cfr Chattogram down by $3.57/mt and $3/mt, respectively, from Thursday. Offers for HMS #1 from Chile heard at $475-480/mt cfr Chattogram on Friday, while mills sought $465-470/mt cfr Chattogram for HMS 1&2 (80:20).  


Imported sponge iron from India traded at $380-385/mt cpt Benapole or $390-395/mt cfr Chattogram, down by $10-15/mt from the prior week. There possibility of further drop following bearish sentiments in the domestic market in India.


In the US domestic market, prices rose by $90-100/gt for January. Yet on Thursday, suppliers came under pressure to sell as the index for HMS 1&2 (80:20) dropped by $10/mt to $409/mt fas Los Angeles West Coast. In the bulk market, Chattogram-based steelmakers booked around four cargoes to refill depleting inventories in the past seven days. Other mills have decided to wait for prices to drop before they book tonnages.


Domestic billet drops BDT2,000/mt

Domestic steel prices remained stable on Friday. The weekly index for ship scrap equivalent to P&S dropped by BDT1,000/mt to BDT42,250/mt ex-works. Domestic HMS 1&2 (80:20) index dropped by BDT875/mt to BDT41,375/mt ex-yards Chattogram. On Friday, a few yards offered domestic scrap at BDT40,000/mt ex-works. Prices have dropped by almost BDT2,000-3,000/mt after they peaked early last week.  


Domestic billet traded at BDT50,500-50,500/mt ex-works Chattogram pulling the weekly index down by BDT2,000/mt Friday.  

The index for large steelmakers’ rebar, Friday, dropped by BDT750/mt to BDT65,750/mt ex-works. Mills witnessed strong resistance from buyers as prices hit a record high. Despite the necessity to maintain their spread between scrap and rebar, mills offered discounts of BDT1,000-1,500/mt to encourage sales. Large mills need to sell rebar at least at BDT71,000-72,000/mt ex-works to avoid losses, said a leading steelmaker. Offers of rebar were at BDT67,000-68,000/mt ex-works on Friday.  


Although demand for finished steel is increasing due to the resumption of infrastructure projects, end-users refuse to accept any rise in prices, said steelmakers. With imported ferrous scrap prices rising by $75/mt in a month, mills are unable to lower their finished steel prices. Medium-scale mills in Dhaka, however, sold rebar at BDT60,000-61,000/mt ex-works as the government instructed some mills to liquidate their stocks immediately.  


Bangladesh’s building contractors’ association has been very vocal about rising raw material costs due to higher steel and cement prices in the country. The association conducted a press conference demanding steelmakers to roll back prices, which they claim is unreasonably high.


($1= BDT84.68)

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