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

Most Asian mills opted for domestic ferrous scrap this week amid wide disparity between imported and domestic prices. Uncertainty in global scrap prices also discouraged buyers heading for Lunar New Year holidays from mid-week. 


With Turkish bids for US-origin HMS 1&2 (80:20) staying flat at $397.5/mt cfr on Monday from prior Friday, traders expect imported scrap prices to rise on account of limited supply and in anticipation of a rise in steel demand post-holidays. They indicated that many yards are not inclined to sell at lower prices and prefer to wait until after Chinese New Year.


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 fell by KRW20,000/mt to KRW395,000/mt and KRW375,000/mt ($336/mt) delivered Incheon and Pohang, respectively. Mills reduced their bids for domestic scrap amid scheduled maintenance, said traders. Most mills have enough inventory for the month. But the decline is expected to be for a short while as domestic supplies remain tight, said traders. 

The weekly Davis Index for domestic Light A fell by KRW20,000/mt to KRW350,000/mt delivered Pohang mill. Demand is expected to fall until Lunar New Year, said importers.



The Davis Index for containerized US-origin HMS 1&2 (80:20), Tuesday, settled flat at $365/mt cfr Taiwan, from prior Friday. Offers rose to $370/mt on Tuesday due to tight supply by exporters, while bids were at $355-360/mt. Traders indicated that many yards are keeping offers firm or waiting till holidays start from Thursday. Prices are expected to rise when mills return post their scheduled maintenance.


On Tuesday, offers for HMS 1&2 (90:10) from Central America in FEU heard at $355-360/mt cfr while bids at $350-355/mt. Taiwanese importers indicated that domestic scrap is still cheaper than imports. Mills said steel prices are unviable amid sluggish steel demand caused by harsh winter and the pandemic. 


The weekly Davis Indexes for domestic HMS 1&2 (80:20) fell by TWD400/mt this week to 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. 



The weekly Davis Index for HMS 1&2 (80:20) was flat this week at VND8,400,000/mt ($364/mt) delivered South Vietnam inclusive of taxes. Sluggish finished steel demand impacted ferrous scrap prices in Vietnam. Scrap exporters have opted to wait until holidays, while mills have limited purchase and are expected to increase buying only after Lunar New Year. A few deals for busheling heard at VND9,200,000/mt delivered South Vietnam on Tuesday.


In bulk, offers for Japanese #2 HMs were flat at $370-380/mt cfr on Tuesday. 



In China, Shagang Steel’s ferrous scrap purchase prices are unchanged from the prior week. Chinese HRC manufacturers were cautious of a possible cut in rebates to 8-9pc from 13pc to curb steel output. HRC prices rose by $10/mt this week in anticipation of rising demand post-holidays and due to pre-holidays stocking.


Q235 150mm square billets in Tangshan fell by CNY10/mt this week due to high inventory to CNY3,580/mt. Many mills are expected to raise billet prices post-holidays with iron ore Fe 62pc rising by $4/mt from the prior week to $160.5 cfr China on Monday. 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 $440-450/mt, Tuesday, up by $55-60/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 but Japanese exporters expect an increase in purchase after New Year.


The weekly Davis Index for the HMS 1&2 (80:20) settled flat at CNY3,200/mt ($497/mt) delivered mill, up by $2/mt from the week prior due to the appreciation of Chinese yuan against the US dollar. Deals for P&S 5ft heard at CNY3,800/mt this week as few buyers stocked material. The market was bearish due to limited buying ahead of holidays, cold weather and rising COVID-19 cases, besides restriction on movement and production cuts to control pollution. 



The weekly Davis Index for domestic HMS 1&2 (80:20) settled flat at THB11,500/mt ($384/mt) delivered Rayong mill inclusive of taxes, amid limited deals and weak global cues. Steel mills are expected to raise bids as they restock scrap inventory in anticipation of a rise in steel demand in mid-February. Several infrastructure projects are expected to be delayed following a rise in COVID-19 cases.


Container shortage and vessel delays added to the woes of steel mills interested in short transit imports. Deals for HMS 1, P&S heard at THB12,400/mt and THB12,600/mt, respectively, on Monday. Thai steelmakers expect prices for HMS 1&2 (80:20) to remain unchanged until Lunar New Year amid limited supply.


Billet offers were at $545-550/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) fell by MYR40/mt ($26/mt) and MYR35/mt to MYR1,410/mt ($375/mt), and MYR1,445/mt delivered western mills and eastern mills inclusive of taxes, respectively.


Malaysian steelmakers were cautious amid an extension of lockdown in Malaysia. Trades slowed with offers for US-origin HMS 1&2 (80:20) in FEU at $380/mt and limited bids at $360/mt. Traders expect an MYR50/mt fall next week on weak demand. Importers are closely watching Turkish and Chinese scrap purchases ahead of new bookings.


($1=JPY105; TWD28; CNY6.4; THB30; MYR4; VND23,085; KRW1,116)

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