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

With the spike in COVID-19 cases, imported ferrous scrap buying interest in India remained subdued on Monday. Despite strict restrictions to curb the spread of the virus, new infections rose to a record high dampening business sentiment. Steelmakers and automakers are trying to keep their operations unimpacted, however, given the pressure on demand, production halts could be imminent.


Major infrastructural projects could continue to operate at a normal pace, however, a shortage of casual workers could pose a challenge. Some mill owners, manufacturers and building contractors have announced measures to care for their workers and provide accommodation onsite to avoid disruptions. Major steelmakers hope domestic steel prices would hold ground amid high import costs and a huge gap between global and domestic steel prices, with domestic prices lower by Rs5,000/mt.


A shortage of oxygen, vaccine dosages and anti-viral injections have also slowed economic activities. Amid higher virus cases and stress on the healthcare system, the Indian rupee has depreciated to below Rs75 levels against the US dollar.


Few sellers held offers for containerized shredded from the UK/EU unchanged from Friday at $465-470/mt cfr Nhava Sheva. However, buyers resisted offers above $455/mt cfr Nhava Sheva amid domestic uncertainty. The Davis Index for containerized shredded settled at $460/mt cfr Nhava Sheva, down by $2.5/mt from Friday. Shredded offers to India have remained rangebound since early April in the absence of major deals in the grade.


Most steelmakers preferred to purchase HMS from short transit destinations like UAE, Africa, and Latin America. The daily Davis Index for UAE-origin HMS 1&2 (80:20) was unchanged at $433/cfr Nhava Sheva, up $3/mt. Offers for Dubai-origin HMS #1 were at $440-445/mt cfr Nhava Sheva.


Demand for HMS was stable on the tight supply of domestic material and the resulting rise in prices. Yards have cut down working hours with the start of Ramadan. Many small-to-medium-scale secondary mills have adopted a wait-and-watch strategy.


The index for US-origin HMS 1&2 (80:20) Monday settled at $431.25/mt cfr Nhava Sheva, down by $1.25/mt from Friday. Offers remained unchanged on firm buying interest from the other Asian countries. Offers for HMS 1&2 (80:20) at $435-440/mt cfr Nhava Sheva with buyers’ interest lagging at around $420-425/mt cfr Nhava Sheva.


On Monday, melting scrap offers in Alang lost steam after shooting up on tight supply and yard closures amid a shortage of oxygen. Offers dropped Rs200/mt to Rs36,800/mt ex-yards after rising Rs1,000-1,200/mt on Saturday. Offers remained at par with imports resulting in to trades suspension.


Major steelmakers including Tata steel, JSW, AM/NS, JSPL and SAIL have diverted their oxygen supply for emergency medical use. This is likely to lower near-term steel production. Steel prices, however, are still expected to stay firm on global cues. These mills are expected to increase exports as the domestic steel demand is expected to slow.


In Mumbai, one of the major scrap consumer markets, rebar prices rose by Rs1,300/mt from Friday. Rebar traded at Rs51,300/mt ex-works Mumbai on Monday widening the spread against the UAE origin heavy melt scrap offered at $440-445/mt cfr Nhava Sheva.



The daily Davis Index for containerized shredded Monday settled at $455.06/mt cfr Indian subcontinent, down by $2.32/mt from Friday; while that for containerized US-origin HMS 1&2 (80:20) was at $430.19/mt cfr Indian subcontinent, down by $1.31/mt from Friday.

Weekly containerized freight rates maintained by Davis Index remained stable at $54.61/mt, $65.09/mt, and $81.83/mt from New York port to India, Pakistan, and Bangladesh, respectively.



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