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

Demand for imported ferrous in India continued to improve on tight domestic supply and low inventories at mills. Deals, however, were mostly for immediate melt requirements amid cautious buying. Mills in Pakistan and Bangladesh could slow their overseas ferrous scrap purchases due to the Eid holidays next week, offering Indian steelmakers an opportunity to restock. 


Offers for containerized shredded hit $485/mt cfr Nhava Sheva on Friday. The Davis Index for containerized shredded, Friday, settled at $486.25/mt cfr Nhava Sheva, up by $2.5/mt. From prior Thursday, the index rose by $21.25/mt. Mills, however, resisted shredded scrap bookings as prices have reached a four-month high.


The index for US-origin HMS 1&2 (80:20), Friday, settled at $457.5/mt cfr Nhava Sheva, up by $2.5/mt from a day ago and up $13.5/mt from the prior week amid thin bookings. Most US suppliers are focusing on domestic demand amid strong settlement prices in May and persisting logistics challenges in seaborne trade. 


The daily Davis Index for UAE-origin HMS 1&2 (80:20) was at $458/mt cfr Nhava Sheva, up by $5/mt. On a weekly basis, index rose $23/mt. Deals for Dubai-origin HMS #1 were in the range of $465/mt cfr Nhava Sheva and offers of $475/mt cfr Chennai. Demand in Chennai is expected to slow amid new restrictions to curb rising COVID-19 cases. Meanwhile, the UAE government has extended its ban on ferrous scrap exports by three months, but market participants believe it is unlikely to affect the Indian markets. 


Offers for busheling in containers were in the range of $525-530/mt cfr Vizag. Mills stayed away from booking containerized P&S and #1 busheling. The indexes for P&S and #1 busheling rose to $498/mt and $519/mt cfr Nhava Sheva, respectively, up by $21/mt and $19/mt from the last week.


Offers for Turning scrap from Latin America to Chennai mills jumped to $425-430/mt cfr Chennai, up by $15-20/mt from a week ago, while offers from West African HMS 20-21mt loading with CI-GI were at $430-435/mt cfr Goa with limited buyers.


On Friday, melting scrap offers in Alang remained unchanged between Rs38,100-38,300/mt ex-yards. Activities at most yards remain suspended. In Mumbai, rebar prices reached Rs50,700/mt ex-works Mumbai, up Rs100/mt from a day prior. Ingot offers in the Mandi Govindgarh rose to Rs46,000/mt ex works. This boosted imported scrap sentiments further as mills turned active for inquiries for UAE, Africa and Latin American materials. 


Steel production at secondary mills in Maharashtra, Punjab, and Chhattisgarh remains slow. Automakers in Maharashtra and Gujarat have also decided to reduce production. Outlook for steel demand could turn bullish once the lockdowns are eased, which could support ferrous scrap deals, believe traders. 


In China, iron ore spot prices for 62pc ferrous content hit record highs amid lingering trade tensions between Australia and China. Prices neared $205/mt cfr China levels amid a sharp rise in steel futures on Friday, state market participants. After the Labour Day holidays, bullish trends continued for the second day on Friday with domestic billet prices up CNY100/mt at CNY5,220/mt ($809/mt) ex-works Tangshan.


Indian mills kept billet export offers above $690-700/mt cfr China. Strong demand for semis in the export market is likely to boost ferrous scrap demand. Also, Chinese HRC prices rose by $20/mt to $975-980/mt fob China with prices already above $1,000/mt cfr Vietnam.  



The daily Davis Index for containerized shredded Friday settled at $490.38/mt cfr Indian subcontinent, up by $2.34/mt; while that for containerized US-origin HMS 1&2 (80:20) rose to $464.48/mt cfr Indian subcontinent, up by $2.48/mt from Thursday.



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