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

Imported scrap offers in Bangladesh soared on Thursday following global cues and persisting short supplies. Mill operators are relieved that the possibility of another lockdown in the county due to second COVID wave has gone down with the news of vaccine becoming available by mid-Jan. Many small scale mills that fear closure are now trying to wait and survive for just a few more weeks to see steel demand bounce back. These mills have decided to postpone their scrap bookings.


Deals for HMS scrap increased amid depleting scrap inventories as mills received fresh orders for steel products. Many traders, who were away for a long time, returned to the market resulting in rising enquiries though demand continues to be sluggish. Domestic billet prices in Bangladesh rose by up to BDT3,000/mt ($35/mt) from last week, giving a push to trades.  


The daily index for Latin America-origin HMS 1&2 (80:20) settled at $360/mt cfr Chattogram, up by $6/mt from Wednesday, gaining $19/mt from November 20. Brazilian traders sought above $360-365/mt cfr Chattogram. Offers for Latin American mix HMS #1 and PNS rose to $365-370/mt cfr Chattogram, while a few containers were booked for the grade at $360-365/mt cfr Chattogram from Australia, New Zealand and Chile origin. Domestic markets in Latin America are firming up amid recovery in steel demand.


The daily Davis Index for containerized shredded, Thursday, settled at $382.19/mt cfr Chattogram, up by $7.55/mt from Wednesday. Offers rose to a 28-month high. Earlier this week, UK origin shredded was traded at $370/mt cfr Chattogram but with surging bulk prices in Turkey and tightening supplies, offers increased to $385-390/mt cfr Chattogram on Thursday from the UK yards. The US and Australian suppliers are offering shredded in the range $380-385/mt cfr Chattogram.  


Traders, who had restocked materials at lower levels, are now attempting to push prices as high as possible. P&S scrap from the UK offered at above $385/mt cfr Chattogram with no buyers at those levels.


In the bulk markets, there were hardly any offers from the US West Coast-origin HMS 1&2 (80:20) amid limited enquiries from the Bangladeshi mills. Many yards are running out of materials while Turkish demand is expected to be very strong. With Turkish mills focused on finished steel sales, suppliers are aiming at $350/mt cfr Turkey for HMS 1&2 (80:20). Bangladeshi mills might revise bids to close deals.


The weekly Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $362.5/mt cfr Chattogram, up by $2.86/mt from Wednesday. Trades for the sheared HMS scrap from the UK traded at $360-361/mt cfr Chattogram on Wednesday. Offers for #1 HMS from the UK have gone up to $370-375/mt cfr Chattogram in containers.


Large scale rebar makers like AKS and BSRM are offering rebar in the range BDT56,500-57,500/mt ex-works, flat from the prior week but they are attempting to hike the price by BDT2,000/mt to offset higher raw materials costs. Also, the gap between medium-scale rebar producers and large-scale producers narrowed to BDT2,000-2,500/mt compared to the usual BDT5,000/mt. Medium-scale rebar makers are offering at BDT54,500-55,000/mt ex-works, cancelling discounts being offered.  


Domestic shipbreaking scrap equivalent to P&S rose BDT500/mt on Thursday to BDT36,500/mt ex-yard Chattogram from Wednesday. HMS 1&2 (80:20) offered at BDT34,500-35,000/mt ex-yard Chattogram for mills who prefer to mix it with premium melting grades like busheling.


Small mills facing cash crunch could announce production cuts again to manage the supply-demand gap. Despite easing supplies, scrapped vessel prices are likely to maintain an uptrend. Offers for scrapped vessel imports were in the range at $380/ldt with indications of increased arrivals and prices reaching $400/ldt by year-end.


($1= BDT84.86)

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