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

Although the government has eased the national lockdown for seven days for the Eid-al-Adha festival, most Bangladeshi mills stayed away from imported ferrous scrap bookings. Large-scale mills have bought material from overseas at elevated prices, but steel sales and prices both remain below their expectations. 


For government projects, contractors were unwilling to purchase steel at firm prices due to predetermined contract amounts. Mills were thus unable to raise finished steel prices despite a jump in the raw material prices. A few mills continued to supply oxygen for COVID-19 patients. Mills with shipbreaking yards opted for scrapped vessel purchases over imported scrap. 


The daily Davis Index for containerized shredded on Friday settled at $553.25/mt cfr Chattogram, down $0.50/mt. From the prior Friday, the index rose by $1.25/mt. Deals were scarce as sellers’ expectations of above $555-560/mt cfr Chattogram found very few takers. Most mills, except large-scale mills, were away from purchases amid a liquidity crunch and tepid steel sales. 


The country will go into stringent lockdown for two weeks starting July 23 with the closures of all government, semi-government, autonomous, and private offices in addition to travel and transport restrictions.


A few mills in Chattogram and Dhaka sought HMS scrap from the UAE to fulfill immediate melt requirements amid a shortage of domestic material. Deals for UAE-origin material have thus picked up in Bangladesh. Offers on Thursday for UAE-origin #1 HMS were at $540-545/mt cfr Chattogram, around $25/mt and $55/mt higher than equivalent levels in Pakistan and India, respectively. 


The daily index for US-origin containerized HMS 1&2 (80:20) was unchanged at $533.75/mt cfr Chattogram. The indexes for UK-origin and Australia-origin HMS 1&2 (80:20) settled at $520/mt and $528/mt cfr Chattogram, respectively, down $1/mt. From the prior Friday, the index for UK-origin material rose by $4/mt, while the index for Australian HMS 1&2 (80:20) was up by $5/mt amid a recovery in HMS demand ahead of Eid holidays. 


The daily Davis Index for HMS 1&2 (80:20) from Latin America, Friday, settled at $518/mt cfr Chattogram, down $2/mt, but up by $4/mt from last Friday. Deals for HMS 1&2 (80:20) were reported at $515-520/mt cfr Chattogram. 


Domestic steel sales bearish

In Bangladesh, domestic steel prices were under pressure amid slow trading. The weekly index for ship scrap equivalent to P&S settled at BDT49,250/mt ($581/mt) ex-yards, down BDT250/mt. The weekly index for domestic HMS 1&2 (80:20) was at BDT46,000/mt ex-yards Chattogram, down BDT250/mt on Friday. 


Landed cost for imported scrap remains firm, resulting in healthy demand for domestic material. Supply, however, is tight. 

The weekly index for billet inched down by BDT250/mt to BDT59,000/mt ex-works. Billet makers focussed on domestic sales as prices of $700-710/mt cfr China in the export market are at least $100/mt lower than the workable levels for Bangladeshi mills. 


For shipbreakers, offers of scrapped vessels reached $580-600/mt cnf depending on the type. The weekly index for rebar from large-scale mills settled unchanged at BDT71,250/mt ex-works. The weekly Davis Indexes for rebar by medium-scale and small-scale mills too were flat at BDT66,250/mt and BDT61,000/mt ex-works, respectively. 



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