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

Imported ferrous scrap prices rose in Asia on bullish global cues and rising freight charges. Sellers believe prices could go up next week ahead of Ramadan break in Malaysia and Indonesia, and other destinations amid restocking by mills.



The daily Davis Index for US-origin containerized HMS 1&2 (80:20), Thursday, was flat at $423/mt cfr Taiwan with bids rising to $415-420/mt cfr and offers rising to $425-430/mt. No containerised deals were heard as bids kept chasing rising offers. US-based exporters are expected to raise offers further on container shortage and higher freight rates. Brisk buying by Turkish mills is also pushing offers higher. The index rose by $15/mt from the prior Thursday (April 1).


Offers for Japanese HMS 1&2 (50:50) rose by $10/mt to $445-450/mt cfr Taiwan while bids were at $435/mt cfr. Traders said most mills are yet to raise bid and are cautious of rising scrap prices in the international markets.


On a weekly basis, the Davis Indexes for containerized #1 HMS, shredded, P&S 5ft and #1 busheling rose by $18/mt, $24/mt, $21/mt and $19/mt to $433/mt, $445/mt, $456/mt and $464/mt, respectively, from April 1. 


Mills are cautiously watching Turkish and Chinese buying trends. Traders anticipate a $10/mt cfr rise next week. Most mills are waiting for Kanto tender results to start negotiations for Japanese scrap.



Vietnamese mills limited containerised scrap purchases and preferred to buy bulk from Japan and Hong Kong amid a shortage of empty shipping containers and rising freight. Mills are cautiously checking Chinese and Turkish purchases ahead of Ramadan. Turkish index for HMS 1&2 (80:20), Wednesday, rose $6.23/mt from Tuesday on strong buying and rising demand. Davis Index estimates that Turkish mills have booked at least six cargoes in the past two days and several cargoes are waiting to be booked. On a weekly basis, the index rose by $7.33/mt to $433.23/mt cfr Turkey on Wednesday.


In the containers market, the weekly index for US-origin HMS 1&2 (80:20), Thursday, rose by $15/mt at $431/mt cfr Vietnam from the prior week. Mills bids rose by $15/mt to $425/mt, while offers rose further to $435-440/mt cfr in TEU’s containers, said traders citing higher freight charges and positive global cues. 


Mills anticipate a rise in demand for HRC and rebars in the export markets and could increase scrap purchases to raise production, said market participants.


On a weekly basis, the Davis Indexes for containerized #1 HMS, shredded, P&S 5ft and #1 busheling rose by $15/mt, $21/mt, $25/mt and $21/mt to $439/mt, $456/mt, $465/mt and $471/mt, respectively, from March 25. Hong Kong oversized P&S deals were heard at $453/ mt cfr in TEU, while in bulk a deal heard at $469/mt cfr this week.


In small bulks, offers for Japanese #2 HMS rose by $10/mt to $450-455/mt cfr after some deals at $445/mt cfr prior week. Traders indicated that mills have paused buying ahead of the Kanto tender on Friday. 



The Davis Index for HMS 1&2 (80:20) settled at $441/mt cfr Jakarta, up $11/mt from the week prior with offers rising to $440-445/mt cfr on Thursday. After the Easter holidays, Indonesian mills have been slow in purchasing scrap and are exercising caution amid rising scrap prices and freight rates. Bids chased limited offers this week. Offers for Australian HMS 1 and 2 (80:20) at $430-440/mt cfr on Thursday.


Mills raised bids ahead of Ramadan to restock inventory. Traders indicated mills could increase purchases as billet export offers from Indonesia and Malaysia to China rose after deals heard at $660/mt cfr. They anticipate a rise in demand for scrap amid an uptrend in Chinese futures for raw material and steel.


The weekly indexes for P&S 5ft and shredded rose by $11/mt each to $461/mt cfr and $451/mt cfr Jakarta, respectively. Offers for Australia and the UK-origin P&S 5ft rose $20-25/mt to $455-460/mt cfr, while bids were at $450/mt cfr. 


Deals for domestic busheling heard at $470/mt delivered Jakarta mill amid a tight supply of high-grade scrap.


Imports from Malaysia remained paused following the announcement of a 15pc export duty on ferrous scrap.

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