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

Mills in South Korea, Taiwan and Vietnam raised bids for domestic scrap amid higher prices and delays in securing imported scrap. Demand for domestic scrap is driven by a rise in freight rates and container shortages.


With the Turkish index for US-origin HMS 1&2 (80:20), Monday, rising to $426.9/mt cfr, up by $6.9/mt from Friday on brisk purchases ahead of Ramadan, Asian buyers were prompted to raise bids for imported and domestic scrap. 


A rise in Chinese steel futures on Tuesday indicates stable demand in Asia and scope for a further rise in raw materials prices. While on the other hand, there is a huge backlog of past orders in the seaborne scrap market due to the unavailability of empty boxes at exporter destination, especially in the USWC. 


South Korea 

South Korean mills raised domestic scrap bids by KRW2,500-12,500/mt ($2-11/mt) effective Tuesday. A major mill booked bulk tonnages for Russian A3 scrap at $425/mt cfr this week. Increased consumption is expected to boost domestic scrap prices further


The weekly Davis Index for domestic Heavy A rose by KRW12,500/mt to KRW425,000/mt ($374/mt) and by KRW5,000/mt to KRW435,000/mt delivered Incheon and Pohang, respectively. Mills have raised new bookings, said traders.


The weekly Davis Index for domestic Light A rose by KRW2,500/mt to KRW410,000/mt delivered Pohang mill. With the current rise in buying prices in Turkey and China, mills are expected to remain cautious and closely watch purchase by other Asian countries.



The daily Davis Index for containerized US-origin HMS 1&2 (80:20), Tuesday, rose by $12/mt to $403/mt cfr Taiwan from Friday. From the prior Tuesday, the index gained $11/mt. Most yards are expecting a further rise next week. Limited deals heard at $400-405/mt cfr, while offers rose to $410-415/mt cfr on Tuesday amid container shortage and vessel delays. 


The weekly Davis Indexes for domestic HMS 1&2 (80:20) rose by TWD300/mt($10.5/mt) to TWD10,500/mt ($367.5/mt) and by TWD250/mt to TWD10,700/mt delivered South Taiwan and North Taiwan mills, respectively. Feng Hsin kept domestic scrap bids flat on Tuesday while raised rebar offers by TWD200/mt to TWD18,400/mt ex-works.


On Tuesday, few offers for HMS 1&2 (70:30) from Central America in FEU heard at $390-395/mt cfr up $5-10/mt from the prior week. Taiwanese importers indicated that domestic scrap is still cheaper than imports, but supply remains tight.



The weekly Davis Index for domestic HMS 1&2 (80:20) found ground on increased demand and inched up by VND10,000/mt to VND8,785,000/mt ($380/mt) delivered South Vietnam inclusive of taxes. Some traders expect bids to rise further on improved finished steel demand and higher raw material prices. 


Bulk HMS 1&2 (80:20) offers from the US west coast rose to $445-450/mt cfr Vietnam, with a deal at $442/mt cfr heard in the prior week. 

Most mills opted to bid for bulk over containerised due to a shortage of empty boxes in supplier destinations. A few deals for busheling in the domestic market were at VND9,600,000/mt delivered South Vietnam on Tuesday.



In China, Shagang Steel raised ferrous scrap bids amid rising raw material prices. Iron ore prices for 62pc Fe rose by $10.7/mt to $167.7/mt cfr Qingdao on Monday from the prior week. With bullish steel, coal and iron ore futures and stricter pollution-related production curbs, market participants expect demand for ferrous scrap to rise. Chinese authorities are pushing for more EAF-based steelmaking in the country. 


Mills could also focus on importing billets to fulfil domestic and international finished steel demand. Production restrictions and rising demand for finished steel pushed domestic billet prices to a 12.5 year high of CNY4,780/mt($728.5/mt) ex-mill, up CNY160/mt from the prior week.


The weekly Davis Index for the HMS 1&2 (80:20) rose by CNY85/mt to CNY3,425/mt ($522/mt) delivered mill from the prior week. Bids for imported scrap too rose following the limited availability of domestic scrap. Chinese mills are expected to increase consumption of domestic scrap to manage pollution levels and to achieve green steelmaking goals. 



The weekly Davis Index for domestic HMS 1&2 (80:20) rose by THB100/mt ($3/mt) to THB12,600/mt ($403.4/mt) delivered Rayong mill inclusive of taxes. Deals reported at THB12,500-12,700/mt delivered mill. Mills raised procurement for domestic scrap amid imported scrap shortage and rising freights. 


A leading exporter in the US confirmed that a Thailand-based steelmaker may raise shredded scrap demand amid a shortage of raw material from Australia and other nearby regions. 


Deals for domestic P&S 5ft heard above THB13,200/mt on Tuesday, with mills preferring domestic scrap or imported billets. Thai mills were offered billets at $620-625/mt cfr basis up $20-30mt from the prior week. Demand, however, has been limited as buyers decided to wait for more clarity on the price direction. 



The weekly indexes for HMS 1&2 (80:20) rose by MYR30/mt to MYR1,500/mt ($362/mt), and MYR1,530/mt delivered western mills and eastern mills inclusive of taxes, respectively. Offers for domestic P&S 5ft were at MYR1850/mt delivered mill on Tuesday.


Malaysia has imposed a 15pc duty on exports of ferrous scrap. Through this duty, the government aims to restrict ferrous scrap exports and secure material for domestic producers. This could lower the country’s dependency on imports, while many traders expect higher demand for domestic scrap in the coming weeks, thereby spiking bids.


Limited offers for US-origin HMS 1&2 (80:20) in FEU at $390-395/mt up $5/mt from the prior week on global cues. Steel mills preferred domestic scrap as it remained competitively-priced against imports.


($1=JPY108.72; TWD28.5; CNY6.6; THB31; MYR4.14; VND23,044; KRW1,133)

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