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

Indian mills were away from imported ferrous scrap bookings and purchased domestic scrap in the present bearish domestic steel market . Domestic scrap prices are lower by at least Rs2,000-2,500/mt compared to the landed cost of imported scrap at present offer levels. 


The weekly Davis Index for cast iron, rotors, and drums, Wednesday, settled at $497/mt cfr Nhava Sheva, down by $5/mt. Bids from Indian buyers were below $480-485/mt cfr Nhava Sheva. Sellers were unwilling for deals at those levels due to the low availability of the grade and container shortages resulting in elevated freight rates. Offers were in the range of $500-510/mt cfr Nhava Sheva on Wednesday. In the Mandi Gobindgarh market, cast iron, rotors, and drums were offered at Rs37,000/mt delivered mills, down Rs1,000/mt from a week ago. 

The daily Davis Index for containerized shredded, Wednesday, settled down by $0.25/mt at $529.25/mt cfr Nhava Sheva on weak demand. Except for major alloy makers, most secondary furnaces in India were unwilling to accept present offers for imported ferrous scrap. Pakistani mills continued to book containerized shredded in the range of $537-540/mt cfr Qasim. Thus, sellers refrained from lowering offers below $530-535/mt cfr Nhava Sheva. 


Deals for shredded, busheling, and P&S were scarce as most buyers preferred to book HMS. A decline in domestic finished steel sales, the arrival of monsoon hitting logistics, and an announcement of power cuts in the northern region dampened buying sentiment. Secondary mills announced production cuts by 30-40pc in major states to avoid losses. Fears over a third COVID-19 wave have also added to the bearish sentiment in India. 


The Davis Index for US-origin HMS 1&2 (80:20) settled at $481.25/mt cfr Nhava Sheva, down $5/mt from Tuesday on a decline in bids. No supplier from the US, Australia, UK, and Latin America was willing to match present bids which are lower by $40/mt against offer levels. 


The daily index for UAE-origin HMS 1&2 (80:20) dropped by $5/mt to $455/mt cfr Nhava Sheva, also on low bids on Wednesday. Many Dubai sellers have now started resisting the bid levels below $435-440/mt for HMS 1&2 (80:20) and found prices in Pakistan more attractive. They believe Indian bids could recover to match global trends in the coming days.


In Mumbai, domestic HMS 1&2 (80:20) offers were at Rs31,800/mt ($427/mt) del mill, around $25-30/mt lower than the equivalent price for imported scrap.


In Alang, melting scrap prices on Wednesday gained Rs200/mt to Rs33,800/mt ex-yards. In Mumbai, recovery in demand pushed rebar prices up by Rs200/mt to Rs46,000/mt ex-works after trending flat since June 24. In Mandi Gobindgarh, around 50pc power cuts announced by the state from July 8- 18, is likely to shut operations at many heavy industries. Ingot prices remained ‘flat to up’ at around Rs43,000/mt ex-works. 


On Wednesday, Chinese steel futures rose by another 2-3pc. The capacity utilization rate is likely to remain stable for the rest of the year in the Hebei province. Trading for rebar and HRC in the domestic markets resumed, and prices could rise for the steel products. Domestic billet prices rose by CNY70/mt from a day ago to reach $5,000/mt ex-Tangshan inclusive of VAT. Iron ore prices for ferrous content 62pc were above $223/mt cfr North China. Chinese HRC export offers jumped by $15/mt amid a rise in demand. 


Indian furnaces expect billet prices to reach above $600/mt fob India. Should billet prices in export prices rise, they may resume ferrous scrap bookings paying above $450/mt cfr. But with most Southeast Asian countries under lockdown, demand for billet is expected to stay bearish. 



The daily Davis Index for containerized shredded, Wednesday, settled at $535.71/mt cfr Indian subcontinent, up by $0.54/mt; while that for containerized US-origin HMS 1&2 (80:20) settled at $497.44/mt cfr Indian subcontinent, up by $0.06/mt. 



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