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

A sharp rise in the imported scrap prices driven by tight supply, globally, forced Asian ferrous scrap buyers to rush for domestic scrap purchases for immediate needs. Domestic scrap prices in Japan, Malaysia and Vietnam rose on strong demand, while prices in China and South Korea showed a slower rise. Higher prices were also supported by a hike of finished steel prices by Tokyo Steel, CSC and Shagang Steel. 



Japanese leading EAF steelmaker, Tokyo Steel announced two successive price hikes within a week. Prices rose by JPY500-1,000/mt. This marked the fifth successive price hike in November. The steelmaker has also raised finished steel product prices for December deliveries by JPY2,000/mt ($19/mt) following bullish global cues and a sharp rise in ferrous scrap purchase prices in Japan.


Effective Nov 17, the company raised the purchase price by JPY500/mt ($4.8/mt) to JPY27,500-30,000/mt ($263-287/mt). Bids increased twice by JPY500/mt ($5/mt) on Nov 14 and Nov 17. Purchase prices for #2 HMS is at JPY30,000/mt ($246/mt) delivered Tahara and Okayama works. 


For December shipments, Tokyo Steel revised prices of finished long steel bars, including rebars by JPY2,000/mt to JPY63,000/mt ex-works. While the prices for H-shaped beams to JPY83,000/mt ex-works.


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 KRW5,000-10,000/mt ($4-9/mt) delivered Pohang this week. 


The Davis Index for domestic Heavy A, Tuesday, up by KRW5,833/mt at KRW337,500/mt and KRW342,500/mt ($310/mt) delivered Incheon and Pohang, respectively, with major steelmakers buying domestic scrap at KRW335,000-340,000/mt delivered Incheon consumer and KRW340,000-345,000/mt delivered Pohang consumer.


A few mills preferred lower-priced Light A scrap with the weekly Davis Index for domestic Light A settling by KRW7,500/mt at KRW325,000/mt delivered Pohang mill. Trades for the grade were reported at KRW320,000-325,000/mt delivered Pohang mill. Suppliers hold materials expecting another round of price hike by mills amid strong steel prices. With Chinese mills increasing billet imports, steel mills in Korea are expected to increase production for December deliveries.



South Taiwan-based Feng Hsin kept rebar and scrap prices unchanged on Monday. Domestic steel mills are preferring local scrap due to rising global scrap prices. Market participants indicated that mills would lift rebar prices in the coming weeks on high input costs. 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 Tuesday moved up by TWD150/mt to TWD8,050/mt ($282/mt) and TWD8,250/mt delivered southern and northern mill, respectively. 


In seaborne markets, US-origin containerized HMS 1&2 (80:20) prices jumped to $298-300/mt cfr Taiwan. Most bids were at $295/mt while offers soared to $300-305/mt on Tuesday. The daily index for containerized US-origin HMS 1&2 (80:20) jumped by $8/mt to $300/mt cfr Taiwan on Tuesday, up to $11/mt from a week earlier. 



The weekly Davis Index for HMS 1&2 (80:20) rose by VND125,000/mt this week to VND7,150,000/mt ($308/mt) delivered South Vietnam inclusive of taxes, with limited deals heard around index price. The domestic steel market is gradually recovering from the impact of storms and construction activities are picking up. Sharp rise in HRC exports prices and rebar sales prices domestically pushed steel mills to restock ferrous scrap aggressively. A few mills were in the bulk market with a couple of deals heard at $340/mt cfr Vietnam from the US west coast supplier yards. Offers jumped $20-25/mt higher than prior week’s deal prices. Containerised imports saw no rise in import volumes as Vietnamese mills focused on bulk scrap purchases.



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 were stable with indications of a further rise. Prices rose 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. SE Asian billet export offers were at $480-490/mt cfr China, up $15-20/mt with no buyers at the moment on the high imported scrap market. 


New ferrous scrap import regulation expected to be out before the start of the year 2021 could be a game-changer for the ferrous scrap market amid tight scrap supply, said a trader. 



The weekly Davis Index for domestic HMS 1&2 (80:20) rose to THB9,600/mt ($318/mt) delivered Rayong mill inclusive of taxes, but up THB100/mt amid stable demand. Deals were heard for the grade at the index price. Mills preferred local scrap amid higher imported prices this week.


The imported scrap market remained highly bullish giving hopes for billet makers to cater to Chinese demand. A few buyers restocked ferrous scrap and a domestic short supply of scrap added to the price rise this week. 



The weekly indexes for HMS 1&2 (80:20) rose by MYR150/mt ($36/mt) and MYR100/mt to MYR1,200/mt ($292/mt), and MYR1,250/mt delivered western mills and eastern mills including taxes, respectively. A sharp rise in the global ferrous scrap and billet prices pushed prices up in Malaysia. Market participants said mills are cautiously buying domestic scrap and avoiding imports. Still, offers for imported US-origin HMS 1&2 (80:20) rose by $15-20/mt to $310-315/mt cfr Malaysia on bullish global cues. 


($1= JPY104.28; TWD28.5; CNY6.55; THB30.16; MYR4.10; VND23250; KRW1,105)

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