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Ferrous market update: October 19-23

Ferrous Market Update 10/23/2020

 

Turkey

  • The daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) increased by $1.05/mt on Friday after Baltic sellers achieved higher prices.
  • Trading continued in the Turkish ferrous scrap market with new deep-sea cargoes booked on Oct 22 where Baltic suppliers sold HMS 1&2 (80:20) at $291-291.50/mt cfr to Marmara and Izmir-based mills.
  • Negotiations also resulted in deals for short-sea cargoes on Oct 22 when HMS 1&2 (80:20) from Romania was sold at $280-281/mt cfr Turkey.
  • Turkish mills booked more than 220,000mt of ferrous scrap this week, Davis Index estimates, but they still require tonnages for November shipment. Purchases are expected to continue next week because of which, suppliers will try to achieve a further price increase.
  • The daily domestic spot rebar prices in Turkey rose by TRY20-60/mt ($2.50-7.50/mt) on Friday amid currency fluctuations. ($1 = TRY7.97)

 

Turkey domestic

  • The weekly Davis Index for DKP scrap (equivalent to auto bundles) in Turkey was unchanged on Monday as Turkish steelmakers opted to hold their purchase prices.
  • Purchase prices for shipbreaking scrap in Izmir were also flat at $275-280/mt delivered. 

 

CIS

  • The weekly Davis Index for HMS 1&2 (80:20) rose by $5/mt fas Baltic Sea and by $3/mt fas Black Sea on Monday as Russian ferrous export activity revived.
  • Negotiations livened up in the Russian export ferrous scrap market last week as Turkish mills need cargoes for November shipment. Bids for HMS 1&2 (80:20) from St Petersburg varied in the range of $282-285/mt cfr Turkey, but suppliers targeted higher levels.
  • The weekly Davis Index for HMS 1&2 (80:20) increased by RUB275/mt ($3.50/mt) in St Petersburg dock on Monday and remained unchanged in Rostov-on-Don dock. ($1 = RUB77.56)

 

Europe

  • The weekly Davis Index for HMS 1&2 (75:25) in the ARAG region increased by €4/mt ($5/mt) on Tuesday on suppliers’ expectations of higher-priced deals.
  • European ferrous scrap exporters raised collection prices after export trading activity increased last week, especially in Turkey. Several Turkish mills are looking for cargoes for November shipment now, and while bids are reported at $280-283/mt cfr for European-origin HMS 1&2 (80:20), suppliers insist on higher levels.
  • European scrap exporters were in the process of negotiating with Turkish steelmakers on Tuesday. (€1 = $1.18)

 

UK dockside

  • Davis Index’s weekly north and south UK HMS 1&2 (80:20) ferrous scrap indices declined by £3/mt ($4/mt) and £4/mt delivered dockside, respectively, on Tuesday.
  • UK ferrous scrap dockside purchase prices averaged lower over the past week after one large bulk processor dropped prices by £5/mt twice in quick succession.
  • It is unclear whether this British bulk exporter dropped prices sharply to stem flows into their yards or whether it was ahead of the curve in marking purchase prices more accurate to the current market.
  • The weekly indexes for north and south UK OA (Plate & Structural) both declined by £4/mt over the same period delivered dockside on Oct 20.
  • The indices for north and south UK 5A/5C (frag feed) ferrous scrap indexes were unchanged delivered dockside over the past week.
  • According to some UK-based scrap market participants, Liberty Specialty Steel has experienced challenges in meeting payment terms over the past few weeks.
  • Davis Index has heard anecdotal information that one supplier experienced a delay of more than 15 days beyond contractual payment terms, potentially incurring credit insurance claims.
  • A Liberty Steel UK spokesman told Davis Index exclusively that like many other UK businesses, the firm was facing tough trading and operating conditions but was working towards maintaining its supplier relationships and efficient operations. (£1 = $1.30)

Spain

  • Davis Index’s weekly northern Spain HMS 1&2 (80:20) and shredded small bulk ferrous scrap indices climbed by €4/mt ($5/mt) cfr on Friday.
  • The few Spanish mills that concluded new business this week were obliged to pay higher prices as fresh deals took their cues from the action in major seaborne trade routes.
  • Davis Index’s HMS 1&2 (80:20) Turkish ferrous scrap import index has increased almost $7/mt to $290/mt cfr from a recent low of $283/mt on Oct 9.
  • With both buyers and sellers concurring the market is on an upward trajectory, mills put up little resistance in accepting a modest price increase.
  • Davis Index has heard anecdotal evidence that supply availability has exceeded domestic consumption to a point where some traders have been able to profitably increase exports.
  • Meanwhile, Davis Index’s UK small bulk ferrous scrap HMS 1&2 (80:20) and shredded increased by €8/mt fob, respectively, on October 23. (€1 = $1.17) 

 

US dockside

  • US East Coast dock collection prices for ferrous scrap were rangebound on Tuesday as tags lagged at unchanged levels or reflected soft movements over the past two weeks. Dock prices in Houston tapered off following elevated prices and demand last week.
  • Export activity has slackened since mid-September although export destination buyers have displayed renewed demand since late last week after several deals concluded. 
  • Turkish mills were aggressively looking for US cargoes of HMS 1&2 (80:20) at $286-287/mt cfr on Tuesday though US scrap exporters held firm at $290/mt cfr at minimum.
  • Market participants expect collection prices on the East Coast to continue at $220-230/gt for HMS 1&2 (80:20) in the short term. The Houston dock is also projecting flat pricing through October.
  • In Boston, the weekly Davis Index for export yard HMS 1&2 (80:20) ticked down by $1/gt delivered dock. P&S 5ft remained unchanged, while shredder feed moved up by $5/gt delivered. 
  • The weekly Davis Index for export yard buying prices in New York held for HMS 1&2 (80:20) and P&S 5ft. The index for shredder feed slid by $2/gt delivered. 
  • In Philadelphia, the index for export yard collection prices of HMS 1&2 (80:20) declined by $3/gt delivered, and P&S 5ft fell by $4/gt delivered Philadelphia dock. The index for shredder feed dropped by $2/gt delivered.  
  • The weekly Davis Indexes in Houston decreased by $4/gt for HMS 1&2 (80:20), while P&S 5ft moved up by $7/gt due to a shortage in the grade. The shredder feed index inched up $1/gt delivered. Prices in Houston were up last week due to stronger export demand and resulting order fulfillments as well as inquiries from Mexico.
  • US West Coast ferrous scrap dock prices were rangebound on Tuesday as container and bulk scrap continues to be of interest to the Asian markets.
  • Pakistani and Bangladeshi buyers were heard inquiring for volumes and though they expressed concerns about rising scrap prices, sellers were firm on higher offers due to low inventories and adequate expected demand. 
  • Asian buyers could prefer Japanese scrap export volumes, which have softened, in the short-term. However, ongoing Japanese and Russian negotiations could firm up prices from earlier in October due to increasing offers from the US. 
  • Asian countries are struggling with continued weak demand for finished steel even though economic recoveries are expected. However, mills expect support for finished steel sales as COVID-19 cases decline, stimulus packages begin to take shape, and China’s expected import orders are realized. 
  • Further scrap price discounts on export bulk deals are unlikely in the course of the next two weeks given the expectations of sideway pricing in November, compared to October settled prices, and claims of tight scrap inventories and flows into the winter.
  • The weekly Davis Indexes in Portland were unchanged for HMS 1&2 (80:20) while P&S 5ft and shredder feed increased by $1/gt delivered.  
  • The improved expectations in the domestic market in November along with active interest from the export market are expected to keep dock prices in the Pacific Northwest relatively flat for the remainder of the month. 
  • In San Francisco, the weekly indexes slightly dampened with HMS 1&2 (80:20) slipping by $4/gt and P&S 5ft decreasing by $1/gt. Shredder declined by $3/gt. Dock prices turned from a negative sentiment early in October to limited change and are now showing the possibility of slightly higher numbers in some deals for the short term. 
  • The weekly Davis Indexes in Los Angeles were flat for all grades for a second consecutive week.  
  • The mid-October downward adjustment on dock prices was initiated by Los Angeles docks due to increasing export demand and tight scrap inventories. 
  • Market participants report very low scrap inventories at docks and various sellers’ sites, especially to complete orders requiring bonus grade material. 

 

US domestic

  • Ferrous scrap prices could trend to strong sideways in the US domestic market in November, contrary to a soft market that was expected following the October ferrous scrap trade. 
  • Some industry participants anticipate prices to firm up towards a sideways to a small increase in November though others are less confident about an upward movement and predict a flat market in Q4 2020.
  • Some scrap yards have reported failing at sideways tags from October as mills that were sidelined this month could firm up their buying plans over the next two weeks. 
  • A shift in the futures market, which has slipped down by around $10/gt over the week on prime scrap, is also adding to the uncertainty on November trade, and therefore, some market participants predict a decline of $5-10/gt in some deals depending on the region.
  • Certain mills, whose order books are improving, are said to be influencing the market through their inquiries on November volumes. 
  • Orders for hot-rolled coil (HRC), cold-rolled coil (CRC), and rebar are defying price and demand trends that were expected to taper. A few market participants have expressed hesitation about orders continuing to flow at the same level in November and HRC prices are indicating the first signs of potentially dropping off next month. 
  • Interestingly, South Korean, Turkish, and Indian companies that export finished steel to the US note that their January and February order books, also at firmer prices, are filling quickly with US-based buyers pointing to the likelihood that finished steel prices may not decline in Q1 2021. 
  • HRC prices are approaching $660-670/nt ($727-738/mt) fob US mill for spot orders representing about a $20-30/nt increase since the start of October. Strong utilization at mills to fulfill November and December deliveries may, in turn, buoy scrap prices. 
  • CRC prices have firmed up and are now about $820-860/nt ($904-948/mt) fob mill, up $20-40/nt against early-October pricing. US mills have made several tube and plate increases in October as well. The tight supply and strong demand for finished steel are also evident in the EU and CIS markets.
  • Reports indicate an overhang of some material left in the market following October trade, especially, shredded scrap, where buyers were unwilling to maintain September prices at sideways levels. Scrap flow has remained moderate for most but has increased over the past couple of months at some yards.
  • A few market participants report experiencing an excess of tonnage and some indicate that several mills still have outstanding tonnage on prior orders. Conversely, some scrap yards report slow feedstock flows and difficulty in locating and attracting good quality scrap. Dealers also note the expectations of continued problems with truck and rail transportation and shortness of manpower for scrap processing despite the higher unemployment rate since COVID-19. 
  • Export flow expectations, tight mill inventories, the approaching winter season, shorter weeks for feedstock receiving, and processing are some other factors that could affect trade over the next two months. November and December also have shorter scrap days for processing and delivery due to holidays and personnel vacations days, while mills are expected to continue improving utilization rates during those months. 
  • Several scrap dealers noted some uncertainty from the US presidential elections on Nov 4, which might influence the timeline to settle the market given the contentious rhetoric on the winner and potential protests regardless of who wins the election.

US containers

  • US containerized ferrous scrap indices increased for the second consecutive week on Thursday. 
  • The increase in the US containerized scrap market is being driven by a range of factors. They include South Asian buyers looking to import scrap from the US, a slow return of Indonesian mills to the scrap market, active requirements until January from Southeast Asia, and higher bulk deals and export container prices in Japanese and Russian markets. 
  • Several East Coast dealers are expecting a strong-sideways of plus $5-10/gt on shredded and P&S 5ft in November. Tight scrap inventories, mill demand, strong iron prices, and active ferrous export inquiries will also support containerized prices through the end of the month. 
  • The weekly Davis Indexes in New York increased for #1 busheling by $9/mt fas, HMS1&2 (80:20) by $10/mt fas, P&S 5ft by $5/mt fas, and shredded by $6/mt fas. Machine shop turnings, which tend to encounter more volatile weekly moves, were up $16/mt as buying interest increased from India. 
  • In Los Angeles, the Davis Indexes rose across most grades with HMS 1&2 (80:20) increasing by $1/mt fas, P&S 5 ft rising by $4/mt fas, and shredded moving up by $3/mt fas. The index for busheling rebounded by $6/mt fas. 
  • Multiple bids on P&S 5ft were heard at $280-285/mt on Thursday due to limited inventory of bonus grades. Several buyers note the discrepancy in the quality of #1 busheling from the West Coast against melting needs, which caused concerns and limited buying volumes. Additionally, the limited interest has resulted in continued oversupply in Los Angeles. 
  • Hot-rolled coil (HRC) and cold-rolled coil (CRC) prices in the US, China, India, and EU have firmed up by 1-4pc week-on-week on fob basis. Ex-warehouse HRC and CRC prices in Turkey have declined by 1-2pc week-on-week while Russian CRC and HRC prices were flat and down 3pc, respectively. Asian markets are concerned about the decline in Russian and Turkish prices, but the increase in import orders from those countries along with the firm pricing in import materials could buoy those finished steel sources. 
  • Japanese export volumes, an alternative to US-sourced scrap, increased export offers this week amid higher domestic scrap prices. The shift from discounts offered last week provided US export prices with additional support.  
  • The Davis Indexes in San Francisco increased for HMS 1&2 (80:20) by $4/mt fas, P&S5ft by $7/mt fas, shredded by $6/mt fas, and #1 busheling by $3/mt fas this week.

 

Mexico

  • Domestic ferrous scrap prices in Mexico increased for most grades in the North, Bajío, and Central areas as demand from the automotive, construction, and manufacturing industries continued to grow.
  • In North Mexico, the weekly Davis Indexes rose for HMS 1&2 (80:20) by MXN380/mt, #1 busheling by MXN254/mt, P&S 5ft by MXN330/mt, machine shop turnings by MXN154/mt, and shredded by MXN230/mt all in delivered terms on Friday.
  • Scrap prices in North Mexico increased by $8-14 /mt for HMS 1&2 (80:20), P&S 5ft and shredded, this week and by $5/mt for #1 busheling and machine shop turnings due to a supply tightness for the materials. 
  • The weekly Davis Indexes in Bajío increased for HMS 1&2 (80:20) by MXN107/mt, #1 busheling by MXN100/mt, P&S 5ft by MXN84/mt, and machine shop turnings by MXN117/mt all in delivered terms. However, shredded decreased by MXN74/mt delivered Mexico consumer.
  • Scrap prices in Bajío and Central areas increased this week by MXN150/mt ($7.1/mt) across all grades amid upward pressure due to high demand in the market.
  • In Central Mexico, the weekly Davis Index climbed for HMS 1&2 (80:20) by MXN162/mt, P&S 5ft by MXN237/mt, machine shop turnings by MXN87/mt, shredded by MXN141/mt, and #1busheling by MXN100/mt all delivered Mexico consumer. ($1=MXN20.88)

 

Japan  

  • Tokyo Steel raised ferrous scrap prices for all grades by JPY1,000/mt at Okayama and Takamatsu works, effective Oct 21. This is the second raise after a JPY500/mt price hike on Monday. Price remained unchanged for the other three works from the prior week. The mill held finished steel prices flat for November deliveries.
  • Domestic scrap shortage and rising demand for Japanese scrap in the domestic and export markets are supporting the price rise. 
  • In the Kanto region, the Davis Index for #2 HMS rose by JPY600/mt fas. Negotiations are on, but no deals were heard. The index for the same grade rose by JPY333/mt fob Japan on Tuesday.
  • HS deals were heard this week with the index for the grade up by JPY500/mt fas.
  • With offers rising, no deals were heard for other grades as Korean and other steel mills refused to raise their bids. The index for #1 busheling (Shindachi) rose by JPY250/mt fob from the prior week. In the domestic market, the weekly index for #1 busheling (Shindachi) rose by JPY500/mt fas Japan.
  • The weekly Davis Index for shredded increased by JPY500/mt from a week ago, but no deals were heard. South Korean mills focused on bulk cargo deals which are priced lower than containerized scrap. 
  • Yards raised offers for Japanese HMS 1&2 (50:50) on Wednesday by $5-10/mt from the prior week. The index for the grade rose by $5/mt cfr Taiwan and by $4/mt cfr Vietnam. ($1=JPY105)

 

South Korea  

  • South Korean domestic ferrous scrap prices were mixed this week. Market participants were expecting Hyundai and Dongkuk Steel to lower bids for domestic scrap by KRW10,000/mt del mill on Monday. But amid a shortage of domestic scrap, these mills have delayed their decision to lower their purchase prices. Steel mills have high scrap inventory and are refusing imported scrap at higher prices.
  • The mills were also negotiating deals with Japanese and US yards, but no deals concluded till the time of publication. 
  • The Davis Index for domestic Heavy A, Tuesday, settled flat delivered Incheon mill but fell by KRW5,000/mt ($4/mt) delivered Pohang mill. Most mills preferred lower-priced Light A scrap this week and the weekly Davis Index for domestic Light A rose by KRW20,000/mt delivered Pohang mill. Trades for the grade were reported at the index price.
  • The weekly Davis Index for containerized HMS 1&2 (80:20), Wednesday, rose by $3/mt cfr. Although it has been over two weeks since the Chuseok holidays, containerized trades remained close to none, defying expectations of traders.
  • In the coming days, mills expect finished steel export and domestic demand to recover with some help from Chinese buying. Bids for billets fell by $5/mt on Wednesday cfr China due to high inventory.
  • The weekly Davis Indexes for P&S 5ft, #1 HMS, and shredded rose by $3/mt cfr South Korea, respectively.
  • Given that global ferrous scrap prices are rising, South Korean mills are waiting for domestic demand to rise from the auto and infra sectors to increase their scrap purchases. ($1=KRW1,138)

 

Taiwan  

  • Rising global prices led Taiwanese mills to cautiously raise buying prices. A few deals were heard on Thursday amid thin trades. The Davis Index for containerized US-origin HMS 1&2 (80:20), Thursday, rose by $6/mt cfr Taiwan from the day prior and by $8/mt from Oct 15.
  • Price for finished steel remained unchanged in Taiwan this week, however, it is expected to rise to offset higher raw material prices, cited market participants.
  • The weekly Davis Indexes for domestic HMS 1&2 (80:20) in South and North Taiwan rose by TWD175/mt ($6/mt) and TWD200/mt delivered mill, respectively, on Tuesday. Offers increased on the back of firm global scrap prices and a shortage in the domestic market.
  • The weekly Davis Indexes for containerized P&S 5ft, #1 HMS, shredded and #1 busheling rose by $4/mt, $6/mt, $6/mt, and $8/mt on rising offers. Few deals for US-origin #1 HMS were heard on Thursday.
  • Taiwanese mills were negotiating for bulk ferrous scrap from Japan, but no deals were heard.
  • Rebar prices were flat in Taiwan on Tuesday for the third week as trades remained slow. Feng Hsin Steel anticipates prices to remain flat until the demand for finished improves.
  • In the bulk market, a deal for Japanese HMS 1&2 (50:50) was heard on Monday. Taiwanese mills were also negotiating for Russian A3 scrap, but deals are yet to be finalized.
  • Market participants are expecting prices to rise amid increasing offers from the US. ($1=TWD29)

 

China

  • In China, Shagang Steel raised domestic scrap prices and finished steel prices for October deliveries. The weekly Davis Index for the HMS 1&2 (80:20) rose by CNY10/mt from the prior Tuesday. 
  • Prices for Q235 150mm square billets in Tangshan, North China’s Hebei province rose by CNY10/mt ex-works including the 13pc VAT. Few small rebar manufacturers resumed production after pausing operations for around 15 days to control pollution. 
  • Chinese September steel output rose by 0.9pc from the previous month as mills ramped up production to meet demand from infra projects. But steel prices could be on a downtrend with increased production, high inventory and the demand for raw material could be sluggish. ($1=CNY6.1)

 

Vietnam 

  • In the containers market, the weekly index for US-origin HMS 1&2 (80:20) rose by $14/mt on Thursday. Offers for the same grade in FEU were at $290/mt cfr, while Australian origin in TEU was at $300/mt. As per traders, no deals were heard as exporters preferred other importing countries who bids higher than Vietnamese mills.
  • With Vietnam concentrating more on purchasing Japanese and Russian bulk scrap, very few containerized deals were heard. Market participants indicated that the major reason for the same is the increase in US-origin containerized scrap prices. They expect mills to buy more Russian A3 scrap.
  • The weekly Index for P&S 5ft and shredded rose by $15/mt cfr on Thursday. In the containers market, the weekly indexes for #1 busheling rose by $16/mt cfr from the prior week. 
  • In the bulk market, an unconfirmed deal for US-origin HMS 1&2 (80:20) was heard at cfr Vietnam. 
  • The weekly Davis Index for HMS 1&2 (80:20) rose by VND25,000/mt($1/mt) delivered South Vietnam inclusive of taxes, with limited deals heard at the index price. Vietnamese mills stayed away from booking imported scrap, while suppliers were not interested in accepting present bid levels for bulk shipments.
  • Vietnamese mills are gradually increasing domestic and imported scrap purchases amid improving billet prices in China. 
  • In the bulk market, a deal for Japanese HS was heard on cfr basis last Thursday. ($1=VND23,180)

 

Indonesia

  • Indonesian mills were less active this week on rising US-origin offers. News of extension of export registration norm to Jan 1, 2021, boosted offer prices last week which remained stable during the week. 
  • Market participants are expecting scrap prices to rise amid global cues and an increase in domestic demand.
  • The weekly Davis Index for HMS 1&2 (80:20) rose by $1/mt cfr Jakarta. A few offers were reported cfr Jakarta on Thursday with limited deals heard at index price.
  • The weekly Davis Index for #1 busheling scrap rose by $1/mt amid higher offers due to an increase in demand from Turkey and other Asian countries. Deals for Japanese #1 busheling were heard on Thursday.
  • The indexes for P&S 5ft and #1 HMS rose by $1/mt and $2/mt cfr Jakarta, respectively.
  • Indonesian billet imports are expected to reduce with the extension of the registration deadline.

 

Thailand

  • The weekly Davis Index for domestic HMS 1&2 (80:20) settled unchanged delivered Rayong mill inclusive of taxes. Mills have slowly started increasing buying after a three weeks hiatus amid high inventory. A few trades were heard for South American HMS 1&2 (80:20) cfr. They expect imported scrap volumes to rise in the coming weeks with a firm demand for billets in China. 
  • Sluggish domestic finished steel demand is still a cause of concern for many mills dependent on the construction and infrastructure sectors. ($1=THB31)

 

Malaysia 

  • The weekly indexes for HMS 1&2 (80:20) rose by MYR100/mt($24/mt) and MYR1,175/mt ($283/mt) delivered western mills and eastern mills including taxes, respectively. The price rise was due to a domestic scrap shortage and an increase in imported scrap prices.
  • No trades were heard in the import market, but demand for ferrous scrap could rise in the coming days. 
  • Market participants are expecting domestic demand for finished steel to rise slowly in the next few weeks as COVID-19 cases decline. Offers for US-origin HMS 1&2 (80:20) were at $260-265/mt cfr. ($1=MYR4.15)

 

India 

  • Indian steel mills continued restocking imported ferrous scrap aided by improved demand for rebar. Containerized trades for all scrap grades including, shredded, HMS, Busheling, PNS, and Turnings have started picking up amid a likelihood of price increases in the next few days. A Vizag-based stainless producer bought over 10,500mt scrap early this week.
  • US West Coast suppliers raised offers for HMS 1&2 (80:20) by $15/mt from the prior week to $315-320/mt cfr Kandla. 
  • The Davis Index for containerized shredded on Friday settled cfr Nhava Sheva, up by $1.79/mt from Thursday and $7/mt from the prior week. Australian and US suppliers were keen on offering more material as steel mills in Mumbai, Gujarat, Chennai, Punjab, and Vizag have ramped up production. 
  • The Davis Index for UAE-origin HMS 1&2 (80:20), Friday, cfr Nhava Sheva, up by $9/mt from the prior week. No South African offers reported as suppliers faced permit issues this week.
  • The weekly index for Turning scrap cfr Nhava Sheva rose by $10/mt from last week. A $5-7/mt rise in container freight rates to South Asian routes pushed up the landed cost of imported scrap.
  • The Davis Index for containerized shredded, Friday, increased by $7.24/mt cfr India subcontinent from Thursday amid higher containerized freight rates, while it rose by $11.37/mt from last Friday. ($1=Rs73.62)

 

India domestic

  • Domestic ferrous scrap prices in India started to gain in the latter part of the week due to a strengthening finished steel market. 
  • The Davis Index for HMS 1&2 (80:20) rose by Rs200/mt ($2.71/mt) del Mandi Gobindgarh from Thursday and by Rs600/mt from Oct 16. 
  • Mills in Mumbai returned to the market on Friday, and thus, the index for HMS 1&2 (80:20) rose by Rs200/mt from the prior day and by Rs400/mt from a week ago.
  • Traders are expecting prices to remain firm, at least for the next few days, should the finished steel trades continue at the present pace.

 

Pakistan  

  • The imported ferrous scrap market in Pakistan was upbeat throughout the week gaining each day. Mills raised inquiries to refill scrap inventories, though the domestic steel market has not been performing as expected and demand remains weak. 
  • The daily Davis Index for containerized shredded, Friday, rose by $1.02/mt from Thursday cfr Port Qasim. On Friday, shredded in containers sold at $318-320/mt cfr Qasim as buyers aggressively bought to restock scrap.
  • Dubai-origin #1 HMS scrap in containers traded at $10/mt higher than a week earlier. Buyers were less interested in buying HMS grade as extra taxes are applicable on the grade compared to shredded. Offers from South American ferrous scrap suppliers were up $10/mt cfr Qasim. 
  • The index for US-origin HMS 1&2 (80:20) settled cfr Port Qasim, up by $1.21/mt from Thursday and up $11/mt from the prior week. Offers for cast iron rotor drums rose $5/mt cfr Pakistan from the prior week. 
  • The weekly Davis Indexes for P&S and busheling cfr Port Qasim, both rose $7/mt, respectively. Active buying from Indonesian markets for these grades pushed offers up. 
  • The weekly Davis Index for commercial Bala billet, Friday, ex-works Punjab inclusive of local taxes, fell PKR500/mt from the prior week. Trades concluded at index prices amid indication of a continued downtrend in the coming days. Despite the resumption of economic activities, many market participants are facing cash flow challenges.
  • The weekly Davis Index for G-60 rebar ex-works Karachi fell by around PKR1,000/mt from last week. Mills canceled discounts on expectations of improving demand.
  • Index for Pure Q toke scrap equivalent to shredded Friday fell PKR1,750/mt ex-works Lahore from late last week. The weekly index for Pure Q Toke (shredded) dropped by PKR1,250/mt in line with easing supply. ($1=PKR161.50)

 

Bangladesh

  • Bangladeshi mills stayed away from the bulk market and opted for containers. Prices have recorded the lowest rise in the subcontinent as buyers resisted high offers.
  • The Davis Index for containerized shredded, Friday rose $1.28/mt cfr Chattogram from a week ago. 
  • In the bulk market, West Coast US-origin HMS 1&2 (80:20) offers jumped by around $15/mt over this week. The weekly Davis Index for containerized US-origin HMS 1&2 (80:20) cfr Chattogram rose $3.84/mt from the prior week. Some trades for Australia, UK, and US-origin HMS scrap were at $315-320/mt cfr Chattogram, with offers above $320/mt cfr Chattogram following strong global cues. 
  • The weekly index for Latin America-origin HMS 1&2 (80:20) rose by $4/mt cfr Chattogram. 
  • The weekly Davis Index for domestic billet ex-works Chattogram fell by BDT250/mt, with trades at the index price. Domestic shipbreaking scrap equivalent to P&S traded ex-yard Chattogram fell marginally by BDT500/mt. Dhaka-based finished steel producers sold rebars ex-works at BDT250/mt lower than from the prior week. 
  • Following high imported scrap prices most mills have raised product prices to offset higher input cost. ($1=BDT84.83)

 

Metallics

 

CIS 

  • The weekly Davis Index for CIS basic pig iron rose by $3/mt in the Black Sea region on Friday after new sales to the US were reported.
  • Buyers from the US were actively booking pig iron over the last 10 days. Thus, CIS suppliers sold three cargoes, achieving higher prices with every deal. 
  • The most recent deal was heard at $377/mt cfr for Russian material (around 50,000mt) late this week, while a few days ago Ukrainian pig iron (50,000-55,000mt) changed hands at around $373/mt cfr. Both cargoes will be shipped from the Black Sea basin. 
  • Late last week, a Russian exporter sold 75,000mt of the material at $369/mt cfr, but this cargo is due to be shipped from the Baltic Sea.
  • The weekly Davis Index for CIS pig iron in Italy remained unchanged on Friday as negotiations did not convert into deals due to a gap between bids and offers. Sellers are targeting $380/mt cfr, while buyers insist on $370/mt cfr, the same as last week.

 

US

  • The weekly Davis Index for basic pig iron (BPI) decreased by $15/mt cfr New Orleans port on Thursday, following several cargoes selling at reduced prices. 
  • Since the end of last week, a couple of CIS producers have sold BPI to the US for December shipment at $369-373/mt cfr Nola.
  • Additional US bids and offers heard since October 15 range between $365-380/mt cfr for BPI cargoes, declining from previous deals at around $387/mt cfr Nola in late September.
  • Brazil negotiated with international brokers on Thursday for BPI sales to China at $388-389/mt cfr, but no deals were confirmed. 
  • The Davis Index for nodular pig iron (NPI) imports increased by $6/mt cfr Nola, as the low-supply material has been offered to the US market at $430-440/mt cfr Nola for December shipment. However, no deals have been confirmed, and buyers countered at lower prices.
  • The weekly Davis Index for US hot briquetted iron (HBI) imports was flat. Neither offers nor bids for HBI were reported, as demand has been low, but it was priced as such Thursday, based on price trends for comparable scrap grades. 

 

India

  • Sponge iron prices were firm this week due to increased iron ore exports and resulting shortage. Many merchant miners in the country are yet to start operations at their allocated mines. A cumulative impact has been hurting Sponge iron producers, and thereby steelmakers.
  • The index for Sponge iron rose by Rs400/mt from Thursday and by Rs800/mt in a week. In Mumbai, the index for Sponge iron settled unchanged from the prior day but rose by Rs100/mt from a week ago. ($1=Rs73.65)

 

India finished steel

  • The daily Davis Index for billet in Mumbai rose Rs900/mt ($12.22/mt) from last Friday following a rise in rebar prices. The index for rebar rose Rs700/mt ($9.5/mt) amid strong demand throughout the week.
  • Rebar demand from the real estate sector has started picking up driven by construction in the affordable and mid-income housing segment.
  • In Raipur, the daily index for billet rose by Rs700/mt from the previous Friday on a sudden surge in sponge iron prices. The daily index for rebar rose by Rs600/mt ($8.51/mt) on healthy bookings.
  • In Mandi Gobindgarh, the daily index for ingot rose by Rs450/mt ($6.11/mt) from the previous Friday with a similar rise in local scrap prices. 
  • In Jalna, the bi-weekly index for billet and rebar Thursday rose by Rs500/mt ($6.79/mt) amid improved demand in Maharashtra and Gujarat. 
  • In Durgapur, the bi-weekly Davis Index for rebar dropped by Rs125/mt ($1.6/mt) from the prior week amid thin trades. 
  • Manufacturers cited that the domestic demand could shrink further. The spike in raw material prices is hurting secondary steelmakers’ margins and they are likely to raise rebar prices in the coming week. 
  • In Chennai, the index for rebar fell Rs375/mt ($5/mt) from the prior week amid sluggish demand due to torrential rain in the region, while the index for billets fell Rs150/mt ($2/mt). ($1=Rs73.67)

 

Shipbreaking 

  • Shipbreaking scrap prices in India increased for the fourth day on Friday, aided by healthy demand from mills in Mandi Gobindgarh.
  • The Davis Index for 12Ani rose by Rs250/mt from Thursday and by Rs650/mt ex-Alang from a week ago. In a day, the index for 10Ani rose by Rs250/mt ($3.39/mt) on Friday and by Rs550/mt ex-Alang from Oct 16. 
  • Trades for plates picked up amid expectations of a stronger auto market in the coming days. With the monsoon retreating, most construction sites have resumed activities, thus generating demand for structural steel.

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