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

Imported scrap offers in Pakistan remained firm despite tepid domestic steel demand. Mega infrastructure projects have started to resume but at a slower pace. Prices for Bala billet have shown an uptick in recent days as producers tried to pass on increased input costs to buyers. Should the prices move up, it could support scrap buyers to raise bids. Trades over this week, however, were limited and Pakistan was behind other subcontinental markets. 


The Davis Index for containerized shredded, Friday, rose by $4.68/mt from the prior week to settle at $329.68/mt cfr Port Qasim. Trades for shredded of EU/UK-origin were at $325-330/mt cfr Port Qasim this week. On Friday, EU/UK suppliers raised their offers for shredded to $330-335/mt cfr Port Qasim following strengthening global cues. Offers have climbed to a 16-month high. 

Dubai-origin #1 HMS scrap in containers traded at $322-325/mt cfr Port Qasim. Few offers for PNS sarya from the UAE were at $325/mt cfr Port Qasim, but buyers were not keen on purchasing this grade similar to HMS, which invokes extra taxes compared to shredded. The Davis Index for UAE-origin HMS 1&2 (80:20) settled at $318/mt cfr Port Qasim, up by $7/mt from prior Friday. 


Offers from South American suppliers for HMS 1&2 (80:20) were at $310-315/mt cfr Qasim. The index for US-origin HMS 1&2 (80:20) settled at $319.67/mt cfr Port Qasim, up by $8.53/mt from the prior week. Offers for the grade from the US and UK were above $320/mt cfr Port Qasim. US East Coast-based recyclers have lifted their offers for containerized scrap due to acute shortage.

The weekly Davis Indexes for P&S and #1 busheling settled at $333/mt and $344/mt cfr Port Qasim, up by $7/mt and $4/mt, respectively. Trades for premium grades scrap were slow this week amid weak domestic support.

Pakistani recyclers have turned active for scrapped ship imports, as indicated by increased inquiries in the market. Scrapped container ships and tankers were offered at $350-360/ldt cfr Pakistan in the Gadani market. Supply of rolling scrap could ease towards December when melting scrap supply is likely to tighten, supporting steel plate prices, said a recycler. 


Domestic steel 

With a reduction in power tariffs announced by the government, Pakistan steel mills could lower their offers for rebar supported by a decline in input costs. In the domestic market, Bala billet prices were at PKR91,000-91,500/mt ($567-572/mt) ex-works Punjab, up PKR1000/mt from the prior week amid recovering demand. The Davis Index for G-60 billet settled at PKR96,000/mt ex-works Punjab, unchanged from the prior week. Trades for the product resumed as demand from the downstream industries showed signs of recovery. 

The weekly Davis Index for G-60 rebar settled flat at PKR109,500/mt ex-works Karachi. In Punjab, G-60 rebar prices were at PKR108,000-108,500/mt ex-works, down by PKY500/mt from the prior week. After staying firm at their prices early in the week, few mills sold rebar at buyers’ expectations. Pakistani currency continued to appreciate to touch PKR160 against the $1 mark for the first time in the last five months, which could aid imports. 

Domestic scrap

In Lahore, the local government could ask some secondary steel mills, especially those without smog or carbon emission control machinery, to pause production for a few weeks due to heavy smog. This dip in production could impact domestic ferrous scrap prices. The index for Pure Q toke scrap equivalent to shredded rose by PKR500/mt at PKR69,000/mt ex-works Lahore, Friday, from late last week. The weekly index for Pure Q Toke (shredded) rose by PKR500/mt to PKR70,000/mt ex-works in line with higher imported scrap prices. 





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