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

Pakistani ferrous scrap importers continued to resist high offers. The extended stalemate has pressurized a few small traders who have unsold containers arriving soon. Sellers fear increased resistance from buyers in South Asia could bring down prices in the coming days due to panic sales.


Following the more than $5/mt downtrend in the Turkish bulk prices on Wednesday major mills in Pakistan decided to postpone trades. The index for HMS 1&2 (80:20), Wednesday, fell by $5.53/mt to $450.88/mt cfr Turkey.  


The Davis Index for containerized shredded, Thursday, settled at $442.5/mt cfr Port Qasim, down by $8.13/mt from Wednesday. A few distressed sales in thin volumes reported in the range of $435-445/mt cfr Qasim. Traders who have materials loaded are being pressured by the lack of interest shown by mills. Yet, most yards in the UK/EU and large traders are offering above $445-450/mt cfr Qasim, said Davis sources. 


A few traders are under pressure to sell-off loaded containers on board vessels that are about to arrive in Pakistan in the coming days. Earlier, they were under the impression that global prices would rise or stabilise. However, the trend has reversed, resulting in some distress sales. 


Market participants expect good restocking demand ahead of the holy month of Ramadan, as activities are likely to slow down on limited operating hours from April 12 onwards.


The daily index for US-origin HMS 1&2 (80:20), Thursday, settled at $430/mt cfr Port Qasim, down $3.75/mt. Due to active demand in the US domestic market which kept suppliers away from overseas trade.


Offers for #1 HMS and P&S from UAE dropped by $10/mt to $420-425/mt cfr Port Qasim, depending on quality. The daily Davis Index for UAE-origin HMS 1&2 (80:20) settled at $413/mt cfr Port Qasim, down by $12/mt on a sharp drop in bids. 


Billet prices up, rebar stable

Domestic steel demand has been stagnant for over a month. The availability of lower-priced steel in the Punjab market has held prices from rising. On Thursday, Bala billet prices in the domestic market rose to PKR106,000-106,500/mt ex-works, up PKR500/mt. Finished flat steel prices by ISL and Aisha steel rose by PKR3,000-3,500/mt following high imported offers.


In Lahore, rebar was offered at PKR131,000/mt ex-works while in the South, major rebar producers kept asking rates at PKR135,000-137,000/mt ex-works Karachi. 


Domestic scrap rises PKR500-700/mt 

As supply remains tight, prices for Art Q toke scrap, equivalent to a mix of HMS and P&S, Thursday, rose to PKR86,000-86,500/mt ex-yard Lahore, higher by PKR500-700/mt than the prior day. In the Lahore and Punjab markets, Pure Q toke scrap equivalent to shredded traded at PKR87,300-87,800/mt ex-yard Lahore.


Industry participants feel that steel demand is expected to turn active next week as buyers would resume pre-Ramadan restocking. This consequently results in high ferrous scrap trades and purchases would pick up. Should prices for HMS drops another $10/mt there would be active demand, anticipate traders.


In Gadani, ship recycling yards are busy with cutting activities and offers for scrapped vessels ranged from $450-460/ldt cnf, marginally down this week. 





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