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

Imported scrap prices in East and Southeast Asian markets rose from the prior week with US-based suppliers raising offer prices despite limited demand. Asian buyers remain wary of buying at higher prices. A shortage of containers, vessel delays and the news of a reduction in free days by shipping lines are upsetting the inventory plans of steelmakers.



The Davis Index for containerized US-origin HMS 1&2 (80:20) settled at $348/mt cfr Taiwan, up $17/mt from the prior day, while it rose by $26/mt from the prior week (Dec 3). A few deals were heard at $330-335/mt cfr early in the week but trades hit $350/mt on Thursday. Many small mills still held bids at $330-335/mt cfr. Taiwanese buyers are cautiously purchasing small quantities for urgent requirements and focusing on domestic scrap as imported scrap prices turn unviable.


With strong Turkish buying and high Kanto bids on Thursday, traders are not expecting global scrap prices to rise further in December.

Feng Hsin raised finished steel and domestic ferrous scrap prices by TWD300/mt ($10.6/mt) on Monday from the prior week. After revision, Feng Hsin’s base offers for rebar at TWD16,000-16,300/mt ex-works southern and northern mills. 


US-based yards offered HMS 1&2 (80:20) in FEUs at $365/mt cfr on rising Turkish buying. The Davis Index for US-origin HMS 1&2 (80:20) Wednesday rose by $24/mt in Turkey from Dec 1. Turkey’s index rose by $66/mt in November.


While demand is limited, rising offers are pushing ferrous scrap prices up in Taiwan. Traders indicated that container shortage and delays in shipments have made importers slow down trades as they expect a correction in global scrap markets in January. 


The weekly Davis Indexes for containerized P&S 5ft, #1 HMS, shredded and #1 busheling rose by $27/mt, $28/mt, $23/mt and $28/mt to $379/mt cfr, $359/mt cfr, $366/mt cfr and $386/mt cfr, respectively. No deals were heard for the above grades as mills were wary of rising offers.


Offer for HMS 1&2 (80:20) in TEU from Australia and New Zealand rose to $340/mt cfr, while bids were at $330/mt cfr. 




A rise in HRC and rebar sales encouraged steel mills to ramp production but increase in Japanese and US ferrous scrap offers have forced them to hold back new scrap bookings. Kanto bids raised offers further on Thursday, but no deals concluded. Steel mills in Vietnam have limited purchasing power as finished steel prices have not increased in sync with scrap prices.


In the containers market, the weekly index for US-origin HMS 1&2 (80:20) settled at $357/mt cfr Vietnam on Thursday, up by $28/mt. There is limited supply from the US and Japan, while offers are expected to rise further next week, said traders. 


Vietnamese mills are expected to renegotiate Japanese scrap in bulk after prices moved up further. In the bulk market, deals for Japanese #2 HMS were heard at $372/mt cfr Vietnam this week. Offers rose to $390/mt cfr on Thursday, but no deals heard. 


Buyers stayed away from containerised scrap amid container shortages and vessel delays. 


The weekly index for P&S 5ft and shredded rose by $28/mt to $381/mt cfr and $378/mt cfr, respectively, on Thursday, amid scrap shortage and rising offers. Vietnamese mills were also inquiring for South American and Australian-origin scrap at lower prices. A deal for South American-origin HMS 1&2 (80:20) heard at $249/mt this week.


Prices for #1 busheling in containers rose $25/mt to $390/mt cfr from a week ago, and offers of $400/mt cfr in TEU were unacceptable for buyers.



Indonesian mills were quiet this week amid rising US-origin offers, delay in shipments and the approaching exporter registration deadline of Jan 1. Many yards stayed away from offering scrap to Indonesia due to the registration norm. They expect limited buying in December. 


The difference between offers and bids in Indonesia stayed around $10-15/mt cfr. The weekly Davis Index for HMS 1&2 (80:20) rose by $24/mt to $371/mt cfr Jakarta. Offers rose to $380/mt cfr Jakarta on Thursday, while no major bids were heard as traders were waiting for clarity on regulations.


The indexes for P&S 5ft and #1 HMS rose by $19/mt and $21/mt to $385/mt cfr and $375/mt cfr Jakarta, respectively. No deals were heard this week.


The weekly Davis Index for #1 busheling rose by $20/mt to $396/mt cfr. With rising offers, mills stayed away from any purchases.


The weekly Davis Index for shredded rose by $20/mt cfr to $380/mt cfr. Rising Chinese demand for billet is expected to push Indonesian mills to buy at higher offers for January.



Kanto tender results encouraged Tokyo Steel to raise ferrous scrap prices for the fifth time in December. Tokyo Steel’s ferrous scrap purchase prices increase to JPY1,500/mt ($13/mt) at Tahara and Utsunomiya plants, effective Dec 11. Prices hiked by JPY1,000/mt at other three works. The new #2 HMS price is JPY37,500/mt ($359/mt) del Tahara plant. Prices are expected to rise further with domestic scrap shortage and rising demand from domestic and overseas steelmakers.


On Thursday, Dec 10, Kanto tender bids rose by an average of JPY8,105/mt. Winning bid for #2 HMS 6,000mt at JPY38,510-38,910/mt.


($1=JPY104.5; TWD28)

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