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

Asian ferrous scrap buyers switched to domestic scrap for immediate needs as imported scrap prices continued to rise amid tight supply, globally. Domestic scrap prices rose in Vietnam and Taiwan, while they remain flat to down in South Korea and Malaysia.


South Korea 

South Korean domestic ferrous scrap prices trended flat with Korean mills reducing or keeping domestic scrap bids flat. Amid rising imported scrap offers, Korean steel mills are expected to focus on domestic scrap. Korean mills were expected to reduce domestic scrap prices by KRW10,000/mt ($9/mt) delivered Pohang last week but due to rising Japanese and US ferrous scrap offers, no cuts were made, said market participants. 


The Davis Index for domestic Heavy A, Tuesday, settled flat at KRW337,500/mt and KRW342,500/mt ($308/mt) delivered Incheon and Pohang, respectively, with major steelmakers buying domestic scrap at index price for a second week.


A few mills preferred lower-priced Light A scrap. The weekly Davis Index for domestic Light A settled flat at KRW325,000/mt delivered Pohang mill. Trades for the grade were reported at the index price. Suppliers held material expecting a price hike amid rising global ferrous scrap prices, but most mills shied away from high-priced imports. 


Russian suppliers have raised A3 offers above $335/mt, said traders, and they expect Korean mills to raise buying prices for Japanese scrap.


Steel mills in Korea are expected to increase production for December export deliveries on the back of healthy Chinese demand, but fall in iron ore prices is expected to pull down offer prices, said sources.



South Taiwan Feng Hsin raised rebar and scrap prices by TWD200/mt on Monday. Domestic steel mills preferred local scrap due to rising global scrap prices. Market participants indicated that mills would lift rebar prices in the coming weeks on high input costs. After the revision, Feng Hsin’s base offers for rebar were at TWD15,700-16,000/mt ex-works southern and northern mills. 


The weekly Davis Indexes for domestic HMS 1&2 (80:20) in South and North Taiwan Tuesday moved up by TWD200/mt($7/mt) to TWD8,450/mt ($296/mt) and TWD8,700/mt delivered southern and northern mill, respectively. 


In seaborne markets, US-origin containerized HMS 1&2 (80:20) daily index settled flat at $317/mt cfr Taiwan. Most bids were at $305-310/mt while offers soared to $320-325/mt on Tuesday. 



The weekly Davis Index for HMS 1&2 (80:20) rose by marginally VND9,500/mt ($0.4/mt) this week to VND7,200,000/mt ($308/mt) delivered South Vietnam inclusive of taxes, with deals heard around the index price. The domestic steel market is gradually recovering and mills have increased scrap purchases both from the imported and domestic markets. A rise in HRC and rebar sales domestically pushed steel mills to restock ferrous scrap aggressively.


Vietnamese mills were negotiating for Japanese scrap and while no deals were heard yet, traders expect trades soon.



In China, Shagang Steel kept finished steel and ferrous scrap prices flat on Tuesday. Fall in iron ore prices and rising steel demand in the domestic market may push ferrous scrap prices up, as per market participants but scrap prices might fall in December due to cold weather and limited demand. 


The weekly Davis Index for the HMS 1&2 (80:20) settled flat at CNY2,740/mt ($416/mt) delivered mill.


On Tuesday, prices for Q235 150mm square billets in Tangshan rose by CNY30/mt with mix indications for December demand. Prices were at CNY3,610/mt ex-works, including the 13pc VAT. SE Asian billet export offers were at $490-495/mt cfr China. 


China reviewed new national standards for the ‘recycled steel raw materials’ on Nov 29. Details on the standardisation are expected to be issued by the end of 2020 for both domestic and imports material and implemented effective Jan 1, 2021.


Newly announced standards for ‘Recycled steel raw materials’ aims to classify domestic scrap steel and related requirements, however, the same is not applicable to the import of high-quality recycled steel raw materials. The adoption of new standardswill enable the country with better to utilize domestic and international renewable steel raw materials resources.


There is a lot of ambiguity among market participants around the ban of solid waste imports into China and whether ferrous scrap would be part of the same. Steel mills are waiting for further clarity on the policy.


The new standards divide domestic ferrous scrap into five grades, namely heavy recycled steel materials, medium heavy recycled steel materials, small recycled steel materials, shredded recycled steel materials and bundled recycled steel materials.

Despite less clarity, there were increasing enquiries from Chinese traders for the US and Japanese scrap post announcement, said traders.


China will also remove its prohibition on 136 steel products imports from Dec 1 as per an earlier announcement from the Ministry of Commerce. This means steel mills need not pay import duties on imported steel which will be reprocessed for exports.



The weekly Davis Index for domestic HMS 1&2 (80:20) rose by THB200/mt($6.6/mt) to THB10,000/mt ($330/mt) delivered Rayong mill inclusive of taxes amid rising demand. Deals were heard for the grade at the index price. The imported scrap market remained highly bullish and a few buyers restocked ferrous scrap. 


Mills preferred local scrap amid higher imported prices this week but cautiously purchased imported too. Domestic short supply of ferrous scrap too added to the price rise this week.



The weekly indexes for HMS 1&2 (80:20) fell by MYR20/mt ($4.9/mt) to MYR1,100/mt ($270/mt), and MYR1,160/mt delivered western mills and eastern mills including taxes, respectively. A fall in global iron ore prices and weak domestic demand pulled down prices in Malaysia. Market participants said mills are cautiously about buying domestic scrap and avoiding imports. Still, offers for imported US-origin HMS 1&2 (80:20) rose to $315/mt cfr Malaysia on bullish global cues. 


($1=TWD28.5; CNY6.57; THB30.27; MYR4; VND23170; KRW1,109)

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