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

Indian steel mills are optimistic of a demand pick up and are poised to raise finished steel prices in September. Most steelmakers have ramped up production and a shortage of domestic scrap and sponge iron has spurred trades for imported scrap.


Indian billet exporters failed to strike deals at higher prices this week. Despite expectations of $415-420/mt fob India, up $5-10/mt from the prior week. Southeast Asian buyer booked billet at around $440/mt cfr Philippines against offers of $445-450/mt cfr and thus market sentiment remained weak. Heavy rains also reduced domestic trades.  


In the bulk market, no trade for HMS 1&2 (80:20) from the US was reported. Offers from the US West Coast were at $300-305/mt cfr Kandla but bids were not above $295/mt cfr Kandla on weak domestic demand. Many buyers are expecting prices to trend flat to down in the coming days.  


The index for containerized shredded settled at $313/mt cfr Nhava Sheva on Friday, flat from a day ago but up by around $6/mt from the prior week. A few trades for US-origin containerized shredded reported at $310-312/mt cfr Mundra this week, offers on Friday were at $315-318/mt cfr Nhava Sheva, despite bids of $307-310/mt cfr Nhava Sheva from buyers.  

The Davis Index for UAE-origin containerized HMS 1&2 (80:20) settled at $297.93/mt cfr Nhava Sheva, up by $2/mt from the prior week. UAE suppliers increased trades to Indian buyers as Pakistan buyers slowed their purchases this week.  


A few trades for Brazilian and Australian-origin HMS 1&2 (80:20) were at $285-295/mt cfr Mundra and Nhava Sheva, flat from the prior week. After dropping last week prices have recovered following global cues. The weekly Davis Index for UK/Europe-origin HMS 1&2 (80:20) settled at $285/mt cfr Nhava Sheva, up by $2/mt from the prior week. Offers for UK-origin HMS 1&2 (80:20) were heard at $285-290/mt cfr Nhava Sheva.  


The index for US-origin HMS 1&2 (80:20) settled at $297/mt cfr Nhava Sheva, up by $2/mt from Thursday but unchanged from the prior week. The index for South African HMS 1&2 (80:20) settled at $293/mt cfr Nhava Sheva, up by $3/mt from the prior week.  


Market participants are uncertain if this hike will sustain or prices will drop as soon as markets normalize. There are concerns over another wave of COVID-19 in winter in many supplier countries. Internationally, buyers are waiting for the results of the US election that will have some impact on all businesses, especially in China and the US.


South African sellers returned to the market this week after more than a month’s gap. With their government tightening the noose around ferrous scrap exports, most traders faced issues with licenses. With permits finally in place, the supply crunch to Indian markets is set to ease in the coming days, believe market participants. This could lead to scrap prices losing some steam.  


The Indian rupee has recovered against the US dollar to below 73 levels from 75 last week. Strengthening rupee will encourage scrap buyers increase purchases, said a trader.    


In Goa, mills inquiries for imported ferrous scrap slowed amid drop in the domestic sponge iron prices. Mills in Chennai bought West Africa-origin HMS 1&2 (80:20) at $275-280/mt cfr Chennai, prices were up by $5-10/mt from the prior week.  

The weekly indexes for higher grade scrap like busheling and P&S in containers were at $328/mt cfr and $315/mt cfr Nhava Sheva, up $3 and $2/mt from the prior week. The weekly index for Turning scrap rose by another $3/mt to $278/mt cfr Nhava Sheva, trades reported around these levels. Brazilian traders sold Turning at $255/mt cfr to Chennai-based traders early this week.  



The Davis Index for containerized shredded, Friday, settled at $306/mt cfr India subcontinent, up from $301.25/mt from last Friday. The Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $289.80/mt Friday up from $285.97/mt cfr India subcontinent.  




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