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

Domestic steel prices continued to rise in Pakistan as mills passed on high input costs to consumers. Heavy winter has disrupted logistics in many parts of the country which is also driving steel prices higher. Prices increased by over PKR12,000/mt ($75/mt) in the last two weeks. However, the market has been able to absorb the price rise instilling optimism among ferrous scrap suppliers and traders. Mills with limited inventories are expected to resume trades actively once suppliers return from New Year Holidays.  


The Davis Index for containerized shredded, Thursday, maintained an uptrend to settle at $470/mt cfr Port Qasim. The index climbed by $0.83/mt from Wednesday and $8.93/mt from prior Thursday. This week, EU/UK-origin containerized shredded traded in thin quantities at $467-470/mt cfr Qasim with most offers at $470-475/mt cfr Qasim. Suppliers have already shut operations and will reopen on Jan 4. The spread of a new strain of COVID-19 in Europe has stopped some leading steelmakers from booking raw material despite depleting inventories. 


In Turkey, bulk imported scrap trades have halted, however, recyclers are bullish on the remaining 10-12 February shipment cargoes. The next round of trades are expected above $480/mt cfr Turkey, anticipate yards.


The Davis Index for UAE-origin HMS 1&2 (80:20) settled at $449/mt cfr Port Qasim, higher by $4/mt from prior Tuesday. Offers heard above $450-455/mt cfr Port Qasim for containers of mixed #1 HMS and P&S sarya. Some Dubai yards were targeting higher in absence of other major suppliers while a few chose to cater to the domestic market. 


The index for US-origin HMS 1&2 (80:20) settled at $450.07/mt cfr Port Qasim, up by $1.32/mt from Wednesday on rising offers. Most shipping lines are expected to stay away from loading activities due to year-end holidays. 


The weekly Davis Indexes for P&S 5ft and #1 busheling settled at $470/mt and $479/mt cfr Port Qasim, up by $5/mt and $6/mt, respectively. Offers for busheling and 4a/4c scrap in limited quantity rose above $480/mt cfr Qasim with no buyers interested at those levels. Indications for cast iron, rotor, and drums from the US have gone up amid expectations of a stronger January market while offers were at $460-465/mt cfr Pakistan flat from the prior week. 


Billet and rebar 

Domestic billet prices surged by $75-80/mt in the last two weeks driven by high imported scrap prices. On Thursday, the weekly index for domestic Bala billet increased by PKR6,375/mt to PKR106,375/mt ($664/mt) ex-works from the prior week. The Davis Index for G-60 billet settled at PKR112,500/mt ex-works Punjab, up PKR6,500/mt from Dec 24. Many small mills opted for production cuts during winter to balance the supply and demand mismatch. 


In Karachi, all major rebar makers have hiked prices citing high ferrous scrap in the international market. The weekly Davis Index for rebar rose PKR7,500/mt to PKR131,000/mt ex-works Karachi. While in Punjab, it increased by PKR5,000/mt to PKR125,500/mt ex-works Punjab from prior Thursday. Amreli, ASG steel and Agha steel hiked prices by PKR5,000-7,000/mt this week despite a drop in sales at these levels. A major mill was heard to have lifted rebar asking rates to PKR134,500-135,500/mt for 12-32mm rebar. 


Domestic scrap

Severe winter in many rural regions of the country has halted construction, while large infra projects catered by leading steelmakers faced cash flow issues. 


The index for Art Q toke scrap equivalent to a mix of HMS and P&S Thursday surged by PKR7,250/mt ($45.31/mt) to PKR85,000/mt ex-yard Lahore from prior Thursday. The weekly index for Pure Q Toke (shredded) rose by PKR7,000/mt to PKR86,500/mt ex-yards amid rising demand and lower availability. On Thursday, the shipbreaking market took a breather amid year-end slowness. Offers for scrapped vessels remained stable at $430-450/ldt cfr Pakistan.



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