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

Imported scrap prices in East and Southeast Asian markets dropped by $5-10/mt from last week in line with downward pressure from the Chinese steel futures market. A sharp drop in Chinese iron ore prices and HRC prices kept most steelmakers away from imported scrap bookings this week as sentiments remained bearish. On the other hand, Turkish suppliers held offers high.


South Korea  

South Korean steelmaker Hyundai steel has lowered bids for imported scrap from last week for grades like #2 HMS, #1 HMS and HS; the steelmaker’s bids remained unchanged for shredded and shindachi (Busheling) scrap this week. The bids for #2 HMS and #1 HMS were placed at JPY27,000/mt and JPY28,000/mt fob Japan, down JPY1,000/mt form the prior week.  

On Sep 24, Hyundai steel announced bids for Japanese higher-grade scrap HS scrap equivalent to P&S, shindachi and shredded grades at JPY31,000/mt, JPY30,500/mt and JPY31,000/mt fob Japan, respectively.  



Softening sentiments in the global markets put pressure on imported scrap prices in Taiwan this week. The daily Davis Index for containerized US-origin HMS 1&2 (80:20) on Thursday dropped by $2/mt to settle at $275/mt cfr Taiwan from Wednesday — a drop of $9/mt from the prior week. Bids from mills have dropped to $270/mt cfr Taiwan on Thursday in line with lowering domestic scrap prices.  


Finished steel prices in Taiwan were largely stable. Feng Hsin steel lowered purchase prices for domestic HMS scrap bookings by $10/mt or NT$300/mt on high input costs. Steel mills preferred buying domestic scrap.  

Market participants informed that while offers are declining as Taiwanese mills are limiting volumes as they seek low-priced scrap from South American yards with bids as low as $260-265/mt cfr.  


The weekly Davis indexes for containerized P&S 5ft, shredded and #1HMS were down by $3/mt, $4/mt and $7/mt and settled at $300/mt cfr, $286/mt cfr and $281/mt cfr, respectively, due to high offers. Few trades were heard at for P&S 5ft at $295-300/mt during the week.



In the containers market, the weekly index for HMS 1&2 (80:20) dropped by $11/mt to $283/mt cfr Vietnam from the prior week. Limited deals were reported in containerized as Vietnamese mills were cautious amid falling markets that is expected to remain weak ahead of the Golden Week holidays in China starting Oct 1. Mills are waiting for price correction as finished steel demand in Vietnam is still sluggish.


Japanese #2 HMS in bulk cargoes was concluded at JPY28,000-28,500/mt fob Japan or equivalent to $300-305/mt cfr to Vietnamese mills. While HMS 1&2 (50:50) bids dropped in the range $290-295/mt cfr Vietnam towards the end of week.  

In containers, the weekly indexes for #1 busheling, shredded and P&S 5ft dropped by $7/mt. $9/mt and $10/mt, to $312/mt cfr, $293/mt cfr and $305/mt cfr, respectively, on lower bids. Most mills preferred buying scrap in small bulk cargoes from Japan as offers have dropped to match their bids. Domestic HMS scrap was offered around VND6,500-6,600/kg delivered mills and remained competitive against imported scrap.  


Vietnamese mills including Formosa steel lowered prices of HRC by at least $10-15/mt this week amid heavy competition offered by Chinese mills who have resumed exports on weak domestic demand 


In the bulk market, importers are still buying cautiously as international scrap prices maintained an uptrend. More Vietnamese mills are exploring the Russian market for lower-priced bulk. Offers for US-origin HMS 1&2 (80:20) were at $305-310/mt cfr on Thursday, while bids dropped below $300/mt cfr Vietnam. Japanese HS and shindachi scrap in small bulk cargo were offered at $320-325/mt cfr Vietnam, while no major deal was heard.  

Shortage of domestic scrap and an expected recovery in finished steel demand could drive scrap bookings in October, said mill owners.  


Indonesian mills focused on domestic scrap purchases this week. The implementation of new regulations effective from Oct 1 kept buyers away from the market. Clarity on new regulations is awaited wherein buyers will have fewer options of importing scrap and will face stricter inspections. Thus, traders have diverted their supply to Taiwan or Bangladesh. 


The weekly Davis Index for HMS 1&2 (80:20) lowered by $6/mt to $290/mt cfr Jakarta while a few offers were reported at $290-295/mt cfr Jakarta on Thursday with no customers showing buying interest.  


The weekly Davis Index for P&S scrap dropped by $7/mt to $313/mt cfr Jakarta on Thursday. The indexes of #1 busheling and shredded settled down by $4/mt to $325/mt cfr Jakarta and by $5/mt to $305/mt cfr Jakarta, respectively, with no deals being heard. Indonesian billet imports are expected to rise over the next couple of months as ferrous scrap imports have slowed now.  


Indonesian mills bought around 30,000mt of billets from Indian and Iranian mills at $445-455/mt cfr early this week.  

Many traders and exporters are still unable to register with authorities to supply ferrous scrap into Indonesia, this is expected to create a shortage of scrap in the country. Market participants are expecting prices to soften amid weak demand from auto and infrastructural sectors.  



Mills delayed deals expectating the market to soften this week. Exporters from the US offered limited ferrous scrap volumes to Thailand. Prices for mix P&S 5ft, #1 Busheling and shredded lowered by $5-10/mt from a week earlier to $300-305/mt cfr Thailand while mills are now waiting of prices to drop in the range $280-290/mt cfr Thailand for further trades to conclude.  





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