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

Indian mills were unwilling to accept present offer prices as they focussed on liquidating finished steel stocks. Monsoons kept work at construction sites and government infra projects very slow. Meanwhile, secondary mills, unable to sustain operations announced production cuts. Industry associations have appealed to the prime minister, Narendra Modi to formulate a robust iron ore supply policy to ease the acute shortage of iron ore in the domestic market and to cap exports.  


Mills faced margins squeeze as sales in both, the domestic and export markets are at prices below their expectations. Major HRC and rebar makers have lowered prices by Rs1,200-2,000/mt ($16-27/mt) for July shipments. Fears over another COVID-19 wave has also added to the bearish sentiment in India. 

The daily Davis Index for containerized shredded, Monday, dropped by $4.5/mt to $530/mt cfr Nhava Sheva. A deal from a stainless-steel maker reported at $530/mt cfr Nhava Sheva pulling the index down. Secondary steel mills, however, were reluctant to accept prices above $500/mt cfr Nhava Sheva.  

On elevated freight rates and limited supply, offers on Monday were at $530-535/mt cfr Nhava Sheva, with buyers away from these levels. The generation rate for HMS scrap has increased, but the supply of prime grades remains low. 

The Davis Index for US-origin HMS 1&2 (80:20) on Monday dropped to $490/mt cfr Nhava Sheva, down $3.75/mt. There is a wide gap between offers and bids and sellers were unwilling to supply at price levels targeted by mills. 


The daily index for UAE-origin HMS 1&2 (80:20) dropped by $5/mt to $468/mt cfr Nhava Sheva. Many sellers kept offers unchanged at $470-475/mt cfr Nhava Sheva, but bids declined from Friday’s levels of $440-450/mt cfr Nhava Sheva. Indian buyers refrained from accepting the current offer levels of UAE-origin #1 HMS, and sellers diverted their supplies to Pakistan at $500/mt cfr. 


In Alang, melting scrap prices on Monday were unchanged at Rs33,600/mt ex-yards from Friday. In Mumbai, rebar prices have remained unchanged for ten days at Rs45,800/mt ex-works. In Mandi Gobindgarh, the index for ingot rose by Rs300/mt from Friday to Rs42,400/mt ex-works after falling by over Rs1,000/mt from late June. 


On Monday, Chinese steel futures showed signs of recovery. Domestic billet prices recovered by CNY20/mt from Friday to $4,890/mt ex Tangshan inclusive of VAT. Iron ore prices for ferrous content 62pc were above $221/mt cfr North China on Monday. But Asian billet and HRC export prices remained under pressure on slow demand. Russian aggression to sell off inventories before the export tax takes effect pressured Asian HRC prices. 


Indian furnaces offered billets at $590-595/mt fob India and kept buying interest for ferrous scrap below $450-460/mt cfr to maintain spread. Availability of domestic at prices lower by Rs2,000/mt against imported scrap kept the seaborne market silent. 



The daily Davis Index for containerized shredded, Monday, settled at $535.56/mt cfr Indian subcontinent, down by $3.23/mt; while that for containerized US-origin HMS 1&2 (80:20) settled at $498.97/mt cfr Indian subcontinent, down by $1.97/mt.

On weekly comparison, the containerized freight rates from New York port were largely flat on persisting shortage of containers internationally. On elevated freight rates, many sellers kept asking rates firm despite weak domestic fundamentals in South Asia amid the ongoing monsoon season, a usual bearish period.



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