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

Pakistani imported ferrous scrap offers surpassed a months’ high. Amid limited supply and non-availability of containers, offers remained firm as a few buyers were willing to pay high prices following strengthening global cues. Buying appetite, however, may soften with the holy month of Ramadan starting from April 13.  


Pakistan’s government announced new restrictions on public mobility due to resurgence of COVID-19 infections. If the situation does not improve, stricter lockdown may affect commercial activities.


On Thursday, offers for mixed #1 HMS and P&S from UAE were at $450-460/mt cfr Port Qasim depending on quality, up by $5/mt from a day prior. The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled at $443/mt cfr Port Qasim, up $1/mt. Amid a shortage of material due to active domestic demand from all subcontinental markets, offers are expected to stay elevated.


A few mills in Pakistan have resumed restocking ferrous scrap in anticipation of robust steel demand after Eid holidays. Usually, post-Eid, activities peak ahead of the Union Budget announcement in June. Market participants are pinning their hopes on another round of big infrastructure push and cash infusion through the fiscal budget.


The daily Davis Index for containerized shredded, Thursday, settled at $464.64/mt cfr Port Qasim up $1.18/mt. Mills booked limited volumes of shredded in the range $460-465/mt cfr port Qasim, prompting most UK and EU-based suppliers to hold their offers at $465-470/mt cfr port Qasim. Despite increasing supplies at yards, a hike in container freight rates increased the landed cost of scrap.  

In Turkey, mills concluded over six bulk cargo bookings for May and June shipments. Resumption in bulk trades pushed offers up in South Asia. Prices of US-origin HMS 1&2 (80:20) rose above $433/mt cfr Turkey with the expectation of reaching $440/mt before Ramadan starts. After Easter weekend, most suppliers reopened for business and are waiting for actual price direction.


The daily index for US-origin HMS 1&2 (80:20), Thursday, settled at $437.50/mt cfr Port Qasim, up $3.21/mt from Wednesday. Offers were at $435-440/mt cfr Qasim while mills were largely inclined to purchase UAE-origin HMS on a short delivery period. Stable demand in the domestic markets kept suppliers away from offering in the seaborne markets.  


Domestic steel prices flat

On Thursday, Bala billet offers remained unchanged at PKR107,500-108,000/mt ex-works Lahore. Trades for G-60 billet were at PKR112,000-112,500/mt ex-works Punjab, albeit, in limited quantities. Demand for billet has remained subdued for more than two months resulting in limited trades for imported scrap. HRC producers, however, have announced a price hike by PKR2,500-3,000/mt for April shipments amid strong international prices and bullish auto demand.  


Long steelmakers in Punjab and Karachi kept offers firm on increased input costing, despite weak demand. Trades for rebar remained comparatively slow at higher prices. Rebar offers were at PKR131,500-132,000/mt ex-works Lahore. Domestic steel prices could see gradual improvement amid an appreciation in the currency, and increased cash flows could accelerate infra projects.


Domestic scrap prices unchanged

Prices for Art Q toke scrap equivalent to a mix of HMS and P&S, Thursday, remained unchanged at PKR88,000-88,500/mt ex-yards Lahore, stable so far this week. Trades for Pure Q toke scrap equivalent to shredded continued at PKR89,500-90,000/mt ex-yard Lahore. In Gadani, demolition work slowed after intense activity during the past 10 days. Recyclers resisted on scrapped vessels or container carriers deals above $480-490/mt cnf Gadani.  





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