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

Increased competition to secure domestic supplies amid high imported offers drove ferrous scrap prices in the Asian markets, especially China and Vietnam. Scrap prices remained largely rangebound in Taiwan, Malaysia and Japan in the week. Elevated freight rates and increased global steel prices pushed up imported scrap prices, while tight supply lifted domestic scrap.


South Korea 

South Korean domestic ferrous scrap prices exhibited mixed trends this week. Prices rose delivered Incheon plant amid increased domestic consumption. Most mills opted for domestic scrap purchases amid a jump in imported prices on high freight charges. Despite strengthening domestic as well as Chinese prices for rebar and HRC, South Korean mills have slowed ferrous scrap imports from Japan, Russia and the US. 


The weekly Davis Index for domestic Heavy A, Tuesday, rose by KRW15,000/mt to KRW460,000/mt ($413.8/mt) delivered Incheon. Major steelmakers bought domestic scrap at KRW460,000-470,000/mt delivered Incheon and Pohang mills. 


Prices rose except in the Pohang region, where most Korean mills, this week, lowered domestic scrap prices by KRW10,000/mt ($9/mt) delivered on slow demand. A few mills preferred lower-priced scrap with the weekly Davis Index for domestic Light A grade at KRW437,500/mt del Pohang, down KRW12,500/mt. While the weekly Davis Index for domestic Heavy A, Tuesday, dropped by KRW10,000/mt to KRW465,000/mt ($418/mt) delivered Pohang.


With Chinese mills increasing billet imports, steel mills in South Korea are expected to ramp up production for exports.



Leading steelmaker in South Taiwan Feng Hsin raised rebar prices by TWD200/mt on Monday while held ferrous scrap prices unchanged. Domestic steel mills are preferring local scrap on high imported prices. Feng Hsin’s base offers for rebar jumped above TWD20,000/mt ex-works, creating room for higher ferrous scrap prices in the coming days.


The weekly Davis Indexes for domestic HMS 1&2 (80:20) in South and North Taiwan marginally dropped by TWD100/mt on Tuesday to TWD11,500/mt ($412.5/mt) and TWD11,700/mt delivered southern and northern mill, respectively. Domestic P&S also traded at TWD11,500-12,000/mt delivered mill basis. 


In seaborne markets, the daily Davis Index US-origin containerized HMS 1&2 (80:20) remained flat at $426/mt cfr Taiwan amid limited trades. Most bids were at $420-423/mt while offers remained firm in the range of $425-430/mt on Tuesday. 



Tokyo Steel held ferrous scrap bids stable after raising prices twice in the prior week. Tokyo steel’s bids for #2 HMS are at JPY44,000/mt ($403/mt) delivered Tahara, JPY44,000/mt delivered Okayama, JPY43,500/mt delivered Kyushu, JPY42000/mt delivered Utsunomiya and JPY42,500/mt delivered Takamatsu. A shortage of domestic scrap and rising demand boosted prices. For May shipments, the steelmaker raised finished flat prices by $46-120/mt on strong global demand. 


In seaborne markets, scrap exporters raised offers for #2 HMS scrap by JPY1,000-1,500/mt to JPY43,500-44,000/mt fob Japan.



In China, Shagang Steel raised its domestic scrap procurement prices by CNY50/mt ($8/mt) on Monday amid continued strength in steel prices which have scaled a decade’s high. The weekly Davis Index for the HMS 1&2 (80:20) settled at CNY3,515/mt ($542/mt) delivered mill, up by CNY15/mt including 13pc VAT. Mills restocked scrap ahead of the Labor holidays from May 1-5.


Ferrous scrap prices might rise further driven by a rise in demand for billets in the domestic market. Chinese buyers have increased billet imports as offers from ASEAN exporters rose above $670-675/mt cfr China up $10-15/mt from the prior week.


Rebar prices in the domestic markets rose to CNY5,300/mt ex-works amid stricter production curbs announced by the Tangshan state government. Prices for Q235 150mm square billets in Tangshan rose CNY30/mt to CNY4,980/mt ex-works including the 13pc VAT.


Some blast furnace mills increased ferrous scrap consumption amid high iron ore prices resulting in a short supply of domestic scrap. 



The weekly Davis Index for HMS 1&2 (80:20) rose by VND250,000/mt this week to VND9,450,000/mt ($410.5/mt) delivered South Vietnam inclusive of taxes. The domestic steel market is gradually recovering in Vietnam and construction activities are picking up. A sharp rise in HRC exports prices and domestic rebar prices encouraged restocking by mills. HRC export offers rose to $950-960/mt cfr. A few mills were active in the bulk market. Offers from the USWC heard above $465-470/mt cfr Vietnam.



Demand for steel products is likely to increase gradually. Increased billet trades in Asia and elevated freight charges raised imported scrap offers to Thailand. The domestic supply of ferrous scrap remains tight, yet many steel mills avoided imported scrap bookings due to Ramadan holidays and preferred domestic material for immediate melt requirements.


The weekly Davis Index for domestic HMS 1&2 (80:20) dropped by THB75/mt to THB13,425/mt ($427.8/mt) delivered Rayong mill inclusive of taxes. On Tuesday, thin trades reported in the range THB13,400-13,450/mt. 


A large EAF-model maker is heard to have bought full shredded cargo at $470-472/mt cfr Thailand after avoiding bulk purchases for a while. Deals for domestic P&S 5ft heard above THB15,000/mt on Tuesday. Offers rose $15/mt in the last two days after a couple of billet deals from ASEAN suppliers heard at $675/mt cfr China.  



The weekly index for HMS 1&2 (80:20) remained unchanged from the prior Tuesday at MYR1,650/mt delivered eastern mills, while rose MYR25/mt to MYR1,625/mt delivered western region inclusive of taxes, respectively. Offers for domestic P&S 5ft at MYR1,900/mt delivered mill. 


Most Malaysian mills have halted purchases from seaborne markets since mid-April. Many mills raised bids for domestic scrap to avoid depletion of inventory.


Offers for imported US-origin HMS 1&2 (80:20) rose by $5-10/mt to $410-415/mt cfr Malaysia on bullish global cues.


($1= JPY108.2; TWD27.87; CNY6.48; THB31.37; MYR4.09; VND23010; KRW1,111) 

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