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

Imported ferrous scrap offers in India continued its upward journey, following global trends. Bids, however, lagged by $25-30/mt from the current offers in the market. Domestic demand continues to outpace supply. Steel mills resisted the high prices, which extended the stand-off between them and sellers this week too. Container freight charges are likely to increase more due to the shortage with Europe under lockdown again.  


The daily Davis Index for containerized shredded Thursday settled at $456.88/mt cfr Nhava Sheva, up by $2.95/mt. Prices rose by $23.13/mt from a week ago following global cues despite slowed trading. Most suppliers went silent for the year-ending holidays while a few offers for shredded from the US and Europe/UK were at prices above $465-475/mt cfr Nhava Sheva to check the buyers’ interest, citing a possibility of sharp rise in freight rates in the coming days.


Indian buyers only opted for lower-priced scrap grades or domestic alternatives, awaiting market correction. Price trends could mimic the 2008 crash in the coming days.   


Domestic demand for rebar is strong in Dubai, and most traders chose to cater to the domestic scrap market. The Davis Index for UAE-origin HMS 1&2 (80:20) Thursday rose by $2/mt cfr Nhava Sheva to $440/mt cfr Nhava Sheva. Dubai suppliers offered #1 HMS at $445-450/mt cfr Nhava Sheva, but buyers bid $420-425/mt cfr Nhava Sheva.  

In Turkey, a few trades for bulk HMS 1&2 (80:20) were reported at prices equivalent to $473-475/mt cfr Turkey, with a $20-25/mt jump from the prior week. The bullish Turkey market sent reverberations to the South Asian markets.  


The daily Davis Index for US-origin HMS 1&2 (80:20) settled at $440/mt cfr Nhava Sheva, up by $2.50/mt. The index surged by $28/mt from December 18, following global cues. Absence of new offers and indications of a stronger domestic market in January aided the price rise. Buyers have turned silent and postponed restocking amid firm offers. Suppliers were not ready for trades at bids of $420/mt cfr.  


Offers for containerized Australian HMS 1&2 (80:20) were at $435-440/mt cfr Chennai, up by $25-30/mt from Dec 18. A few trades for Australia and the UK-origin HMS 1&2 (80:20) were at $435-440/mt cfr Nhava Sheva in very limited quantities.  


The index for #1 busheling settled at $468/mt cfr Nhava Sheva, up by $18/mt from the prior week. The weekly index for Turning scrap was at $387/mt cfr Nhava Sheva, up by $8/mt, with offers at $390-395/mt cfr Nhava Sheva on Thursday. Buyers, however, were unwilling to accept current offer levels. P&S scrap offers were at $445-450/mt cfr Nhava Sheva thus pushed the weekly index up $14/mt from the prior Friday despite no confirmed deals.


China is expected to start imports of ferrous scrap under the ‘recycled raw material’ category from Jan 1 with zero import duty on steel scrap. This is likely to keep market sentiment supported and increase inquiries from Chinese mills. Chinese domestic billets traded at CNY3,880/mt ex-Tangshan on Thursday, up by CNY10/mt from a day ago.  


A strengthening billet export market could support scrap imports in India. Billet on Thursday was offered at $525-530/mt fob Iran. Offers for the same were as high as $600-620/mt cfr South Asia to Philippines and Thailand pushing Indian mills to target above $580-590/mt fob India, up $50/mt from the prior trade concluded at $535/mt fob India, said a trader.  



The Davis Index for containerized shredded, Thursday, settled at $456.98/mt cfr India subcontinent, up by $3.18/mt from Wednesday. The Davis Index for containerized US-origin HMS 1&2 (80:20) rose to $439.92/mt cfr India subcontinent, up by $2.16/mt from Wednesday. International containerized freight prices continued to trend up amid a shortage of containers in Asia. Many shipping lines have taken time off and loading will be paused for the New Year holidays.  




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