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

Pakistan mills continued to book imported ferrous scrap for their pre-Ramadan restocking despite high offers. Most mills anticipate strong steel demand post-Eid holidays. Containerised ferrous scrap prices to Pakistan reach a month’s high on Tuesday. Elevated freight rates kept offers firm. Buying appetite, however, may slow with Ramadan starting from April 13. 


Despite the sharp rise in COVID-19 infections and the imposition of new restrictions on public mobility, steel production has not hampered much as of now. Most mills are still operating with a full workforce. The slowdown in activities may be seen from next week onwards.


The Davis Index for containerized shredded, Tuesday, settled at $460/mt cfr Port Qasim unchanged from Monday. Mills booked considerable volumes of shredded at $460-465/mt cfr Qasim prompting the UK and EU-based suppliers to target $468-470/mt cfr Qasim on Tuesday. Also, despite increasing supplies at yards, a hike in container freight rates increased the landed cost of scrap. 


The daily index for US-origin HMS 1&2 (80:20), Tuesday, settled at $433.75/mt cfr Port Qasim, up $1.25/mt from Tuesday. Offers were at $435-440/mt cfr Qasim while mills targeted $430-433/mt cfr Qasim. Very few export deals heard as healthy domestic demand in the US reduced offers to the seaborne market.


Offers for mixed #1 HMS and P&S from UAE at $445-450/mt cfr Port Qasim depending on quality. The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled at $440/mt cfr Port Qasim, stable from a day prior. Mills have actively booked deals at $435-440/mt cfr Port Qasim. There is a shortage of materials due to active domestic demand in the emirates.


Billet prices lose steam

On Tuesday, Bala billet offers lost steam and dropped PKR500/mt from Monday to PKR107,500-108,000/mt ex-works Lahore. Offers for G-60 billet at PKR113,000-113,500/mt ex-works Punjab. Demand for billet has remained weak resulting in limited trades for imported scrap.


Most large steelmakers in Punjab and Karachi announced a rebar price hike but trades slowed at higher prices. Rebar offers at PKR131,500-132,000/mt ex-works Lahore. Local rebar offers at PKR121,000-122,000/mt ex-works Punjab.


Domestic steel prices are anticipated to see gradual improvement but an appreciation in the currency and steady domestic fundamentals could support steel demand. Market participants are pinning their hopes on another round of big infrastructure push and cash infusion through the fiscal budget to be announced in June.  


Domestic scrap prices stable 

Prices for Art Q toke scrap equivalent to a mix of HMS and P&S, Tuesday at PKR88,000-88,500/mt ex-yard Lahore flat from Monday. Trades for Pure Q toke scrap equivalent to shredded continued at PKR89,500-90,000/mt ex-yard Lahore.


For shipbreakers, activities gained momentum ahead of Ramadan. Most yards have increased demolition activities as over 10,000ldt tonnages were generated in the last 10 days, according to shipyard owners in Gadani. 


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