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

Mills in South Korea, Taiwan and Vietnam are yet to get back from holidays. Some buyers are waiting for Chinese importers to resume trade and are closely tracking Turkish ferrous scrap purchases. With Japanese domestic scrap prices rising by JPY5,000-7,000/mt ($47.61-66.66/mt) from the prior week, mills opted for domestic ferrous scrap this week amid anticipation of a further rise in imported scrap prices.


With Turkish bids for US-origin HMS 1&2 (80:20), Monday, rising by $3.9/mt from Friday to $413.75/mt cfr, traders expect imported scrap prices to rise on account of limited supply and in anticipation of a rise in steel demand post-holidays. Offers rose by $15-20/mt from Friday for India, Pakistan and Bangladesh with yards refusing to accept lower bids.



Tokyo Steel raises domestic scrap bids by JPY2,000/mt ($19/mt) at Utsunomiya works and by JPY1,000/mt at other four works. Revised #2 HMS price effective Feb 17, were at JPY37,000/mt($351/mt) delivered Utsunomiya and JPY39,000/mt delivered Tahara.


At Kansai tender 5,000mt #2 HMS sold at JPY39,005/mt fas on Tuesday. Price were similar to Kanto tender, which was up JPY5000-7000/mt this month.


South Korea 

South Korean domestic scrap prices trended down this week. Suppliers reduced offer prices to match lower bids placed by mills before holidays. In the import market, no deals heard as Japanese exporters raised offer prices.


The Davis Index for domestic Heavy A rose by KRW5,000/mt ($4.5/mt) and KRW10,000/mt to KRW400,000/mt ($363.30/mt) and KRW385,000/mt delivered Incheon and Pohang, respectively. Mills have slowly raised bids for domestic scrap as yards refuse to sell at lower prices on firm global ferrous scrap demand, said traders. Most mills are expected to refill inventories post holidays. Offers are expected to rise further as domestic supplies remain tight.


The weekly Davis Index for domestic Light A rose by KRW15,000/mt to KRW365,000/mt delivered Pohang mill. Demand is limited amid Lunar New Year, said importers.



The Davis Index for containerized US-origin HMS 1&2 (80:20), Tuesday, rose by $2/mt to $370/mt cfr Taiwan, from prior Friday. Offers rose to $375-380/mt on Tuesday due to tight supply by exporters, while bids were at $360-365/mt, both up by $10/mt from week prior. Traders indicated that many yards are raising offers in anticipation of a rise in demand post holidays. Demand for domestic scrap was limited as most mills are under annual maintenance and expected to raise bids post holidays.


The weekly Davis Indexes for domestic HMS 1&2 (80:20) was flat this week at TWD9,750/mt ($348/mt) and TWD10,000/mt delivered South Taiwan and North Taiwan mills, respectively. Most mills reduced buying due to maintenance and uncertainty in ferrous scrap prices. 


On Tuesday, limited offers for HMS 1&2 (90:10) from Central America in FEU heard at $360-365/mt cfr with suppliers preferring other regions for better prices. Taiwanese importers indicated that domestic scrap is still cheaper than imports but have limited supply. 



The weekly Davis Index for HMS 1&2 (80:20) was flat this week at VND8,400,000/mt ($365.6/mt) delivered South Vietnam inclusive of taxes. Prices are expected to rise post holidays and on global cues with Vietnamese mills expected to book Japanese scrap next week. 


Demand for finished steel is anticipated to rise in March on the recovery of auto and infrastructural sectors. Scrap exporters have opted to wait until holidays, while mills have limited purchases and are expected to increase buying only after New Year holidays. A few deals for busheling heard at VND9,200,000/mt delivered South Vietnam on Tuesday.


In bulk, offers for Japanese #2 HMS rose by $40-50/mt to $415-420/mt cfr on Tuesday. 



In China, Shagang Steel’s ferrous scrap purchase prices were unchanged from the prior week amid Chinese New Year holidays. With importers booking trial orders for 3,000mt each from South Korea and Singapore at $465/mt cfr in the prior week, traders expect prices to rise post holidays on strong finished steel demand from infrastructure and real estate sectors. 


Also, iron ore demand rose this week and is expected to rise further next week. Iron ore Fe 62pc rose by $6/mt from the prior week to $166.8 cfr Qingdao on Monday.


The weekly Davis Index for the HMS 1&2 (80:20) settled flat at CNY3,200/mt ($495.5/mt) delivered mill, down by $1.5/mt from the week prior due to the depreciation of Chinese yuan against the US dollar. Steel prices are expected to remain flat till holidays and rise thereafter due to positive outlook on global trade and successful vaccination drives.


In Tangshan, Q235 150mm square billets traded flat at CNY3,850/mt due to high inventory, holidays and pollution-related stoppages, this wee. Many mills are expected to raise billet prices post-holidays. Prices are likely to stabilize after Chinese New Year as demand rises and inventories fall.


Traders overseas expect Chinese demand for ferrous scrap to sustain in February after Lunar New Year holidays as steel mills start restocking. Japanese HS scrap offers rose to $455-465/mt, Tuesday, up by $10/mt from the prior week. Importers indicated that scrap shortage in Japan and anticipation of a rise in finished steel demand post-holidays made exporters raise offers this week. No small bulk deals heard this week after China expanded sources for imported scrap with trial orders from South Korea and Singapore week prior. 



The weekly Davis Index for domestic HMS 1&2 (80:20) settled flat at THB11,500/mt ($385/mt) delivered Rayong mill inclusive of taxes, amid limited deals. Mills are opting to wait and buy cautiously post Chinese New Year. Steel mills are expected to raise bids as they restock scrap inventory in anticipation of a rise in steel demand. Several infrastructure projects are expected to be delayed following a rise in COVID-19 cases. Deals for domestic P&S 5ft heard at THB12,400-12,800/mt on Tuesday.


Container shortage and vessel delays added to the woes of steel mills interested in short transit imports. 


Billet offers rose by $10/mt to $555-560/mt cfr Thailand from the Russian mills, but buyers preferred to wait until holidays to gain clarity on price direction. 



The weekly indexes for HMS 1&2 (80:20) flat at MYR1,410/mt ($350/mt), and MYR1,445/mt delivered western mills and eastern mills inclusive of taxes, respectively.


Malaysian steelmakers are cautious amid an extension of lockdown in Malaysia and rising global scrap prices. Buyers prefer to wait and analyse market sentiments. Trades slowed with offers for US-origin HMS 1&2 (80:20) in FEU at $390/mt, up $10/mt from week prior and limited bids at $360/mt. Traders were expecting an MYR50/mt fall this week but as global scrap prices remained firm, domestic yards refused to reduce offer prices in anticipation of a rise in demand from the export market. Importers are closely watching Turkish and Chinese scrap purchases ahead of new bookings.


($1=JPY105; TWD28; CNY6.4; THB29.9; MYR4; VND22,975; KRW1,101)

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