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

Domestic ferrous scrap prices in most Asian markets trended flat to up as offers from the US and Europe rose this week. In Japan, domestic prices remained flat, while export prices rose on global cues. 


South Korea 

South Korean domestic ferrous scrap prices trended up amid rising imported scrap offers. Except for Hyundai, most Korean mills increased domestic scrap prices by KRW10,000-20,000/mt ($10-18/mt) delivered Pohang this week. No deals in containerised or bulk were heard.


The Davis Index for domestic Heavy A, Tuesday, rose by KRW11,667/mt at KRW331,667/mt and KRW336,667/mt($302/mt) delivered Incheon and Pohang, respectively, with deals heard at KRW330,000-340,000/mt delivered Incheon consumer and KRW335000-345000/mt delivered Pohang consumer. 


Most mills preferred lower-priced Light A scrap with the weekly Davis Index for domestic Light A settling up by KRW12,500/mt at KRW317,500/mt delivered Pohang mill. Trades for the grade were reported at KRW315,000-325,000/mt delivered Pohang mill.

With Chinese mills increasing billet imports, steel mills in Korea are expected to increase production for December deliveries.



Steelmaker Feng Hsin kept rebar and scrap prices unchanged on Tuesday. Domestic steel mills are preferring local scrap due to rising global scrap prices. Mills are finding import offers at higher prices unviable, said traders. Market participants indicated that mills had to raise rebar prices last week and might have to increase further to manage the input cost. Feng Hsin’s base offers for rebar remained at TWD15,200/mt ex-works. 


The weekly Davis Indexes for domestic HMS 1&2 (80:20) in South and North Taiwan was flat on Tuesday at TWD7,900/mt ($276/mt) and TWD8,100/mt delivered southern and northern mill, respectively. 


In seaborne markets, US-origin containerized HMS 1&2 (80:20) offers rose to $293-295/mt cfr Taiwan but no deals heard. Most bids were at $288/mt with deals heard at $290/mt on Monday. The daily index for containerized US-origin HMS 1&2 (80:20) was flat at $289/mt cfr Taiwan on Tuesday.


In the bulk market, no deals were heard with steel mills being cautious of rising imported scrap. 



The weekly Davis Index for HMS 1&2 (80:20) rose by VND2500/mt this week to VND7,002,500/mt ($303/mt) delivered South Vietnam inclusive of taxes, with limited deals heard around index price. Domestic markets had come to a standstill with no deals heard last week and limited buying this week. Shortage of ferrous scrap and logistical issues due to a storm last week has delayed deals. 


Suppliers on the other hand were not interested in accepting lower bids for bulk shipments. In the bulk market, no deals were confirmed, while offers for US-origin HMS 1&2 (80:20) rose by $5/mt from the prior week to $320/mt cfr. Containerised imports saw no rise in import volumes as Vietnamese mills focused on bulk scrap purchase.



In China, Shagang Steel raised finished steel prices for November deliveries, which impacted ferrous scrap prices. The weekly Davis Index for the HMS 1&2 (80:20) settled at CNY2,750/mt ($416/mt) delivered mill, up by CNY25/mt($4/mt). Scrap prices might rise further, driven by a rise in demand for billets in the domestic market.


Prices for Q235 150mm square billets in Tangshan, North China’s Hebei province, rose by CNY80-100/mt to CNY3,570-3,590/mt ex-works, including the 13pc VAT. Billets prices are at an 18-month high, with steel mills increasing billet imports. A deal for 33,000 mt Indonesian steel billets was heard at $460/mt cfr China on Monday with offer prices expected to rise further.


Chinese government agencies are formulating further rebates for steel exporters with ultra-low emission levels. This is likely to help mills invest in capacity upgrades and also increase exports. Also, the new grading for ferrous scrap is expected to improve the quality and quantity of scrap collection in China, also promoted the use of EAFs.



The weekly Davis Index for domestic HMS 1&2 (80:20) was unchanged at THB9,500/mt ($312/mt) delivered Rayong mill inclusive of taxes, but up $6/mt due to the depreciation of Thai Baht. Deals were heard for the grade at the index price. Demand from steel mills is rising slowly and traders are able to fulfil the same from domestic scrap market. Mills preferred local scrap amid higher imported prices and are in no mood to raise bids.


Deals for P&S 5ft heard at THB9700/mt on Tuesday. But sluggish domestic steel demand is still a cause of concern for many mills in Thailand. Scrap demand could also dip in the coming days as mills have enough inventories to fulfill their production requirements. 



The weekly indexes for HMS 1&2 (80:20) rose by MYR50/mt($12/mt) to MYR1,050 /mt ($255/mt), and MYR1,150/mt ($279/mt) delivered western mills and eastern mills including taxes, respectively. Price rose by $2/mt due to the depreciation of Malaysian ringgit. 


Market participants said mills are cautiously buying domestic scrap and avoiding imports. Still, offers for US-origin HMS 1&2 (80:20) rose by $5/mt to $290-295/mt cfr on bullish global cues.


($1= JPY104.6; TWD28.5; CNY6.6; THB30; MYR4.12; VND23.1; KRW1,116)

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