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

Following a sharp rise in steel prices, demand for imported scrap rose in Pakistan. Large-scale steel mills booked containerized ferrous scrap placing the most attractive bids in the Indian subcontinent. Small-scale mills also showed a willingness to accept present offer levels, fearing a worsening supply crunch and non-availability of offers. Many wanted to secure material before the month-end when Eid-holidays could slow the pace of activities. The impact of the new COVID-19 wave remained limited on business activity. 

The Pakistani rupee continued to depreciate against the US$, reaching PKR159.6 on Friday from PKR156.5 a week ago, which pushed imported scrap prices up.


The daily Davis Index for containerized shredded, Friday, was at $545/mt cfr Port Qasim, up by $4/mt. Meanwhile, from last Friday, the index jumped by $5/mt, scaling a new high since 2009, according to sources. Early this week, deals were at $538-542/mt cfr. Trade prices subsequently rose to $545/mt cfr Qasim on Friday. Most offers on Friday were at $545-550/mt cfr Qasim. 


Trading for UAE-origin material picked up this week on a rapid rise in domestic steel prices. Sellers diverted offers in the Pakistani market amid slow demand in India and Bangladesh. The daily Davis Index for UAE-origin HMS 1&2 (80:20), Friday, settled at $496/mt cfr Port Qasim, up by $1/mt from a day ago and $9/mt from last Friday. UAE-origin mixed #1 HMS and P&S was reportedly sold at $505/mt cfr Port Qasim, with a few sellers even targeting $510/mt cfr Qasim. Pakistani mills paid at least $30/mt higher than the equivalent Indian prices amid a supply crunch in the domestic market.


The index for US-origin HMS 1&2 (80:20), Friday, settled at $504.25/mt cfr Port Qasim, up by $1.75/mt from a day ago and $3/mt from the prior Friday. In the US domestic market, HRC prices were above $1,850/nt ex-works, keeping demand for ferrous scrap healthy. July settlements concluded at prices $20/gt higher than June for prime grades. Prices were unchanged for HMS and shredded from the prior month. 


The Davis Index for P&S 5ft settled on Friday at $553/mt cfr, while that for #1 busheling was at $575/mt cfr Port Qasim, both up by $5/mt from the prior Friday. Most buyers remained away from any purchases of high-grade scrap.


Rebar and billet prices surge 

All major rebar producers in Karachi and Punjab have hiked prices by PKR5,000-5,500/mt ($31-33/mt) effective July 7. Amid tight supply for ferrous scrap and the resulting rise in input costs, prices jumped despite slow sales. Ahead of Eid holidays in late July and before monsoon season reaches its peak, most contractors were looking to complete construction projects. 


The weekly Davis Index for rebar rose to PKR155,750/mt ex-works Karachi and PKR154,750/mt ex-works Punjab, both by PKR5,250/mt on improving demand. Local rebar offers were above PKR132,000/mt ex-works Lahore. A wide gap between steel prices in the global and Pakistan’s domestic markets, encouraged steelmakers to raise offers. 


The weekly index for domestic Bala billet jumped up by PKR10,000/mt ($62.6/mt) to PKR130,000/mt ($815/mt) ex-works. The weekly Davis Index for G-60 billet was at PKR138,500/mt ex-works Punjab, up PKR12,250/mt from the prior Friday.


Following firm imported scrap offers and tight domestic supply, the weekly indexes for Art Q toke scrap (equivalent to a mix of HMS and P&S) and Pure Q toke scrap (equivalent to shredded), Friday, surged to PKR102,000/mt and PKR103,500/mt ex-yard Lahore, respectively, up by PKR6,000/mt, amid a slow demolition and ship-breaking activities.


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