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

Most Asian mills opted for domestic ferrous scrap this week as imported material remained unviable. But with a steep decline of $14/mt in the index for Turkish imports of US-origin HMS 1&2 (80:20), the situation could change. Offers for Asian buyers could decline in the coming days. 

South Korea 

South Korean domestic ferrous scrap prices trended flat this week. Suppliers kept offers firm but mills resisted those levels. In the export market, many mills focused on buying domestic material amid vessel delays. Lockdown extensions in Europe made many mills focus on bulk scrap from Japan. 

A Korean mill bought 50,000 mt of #2 HMS at JPY42,000/mt fob($404/mt) on Thursday and Friday. The deal was originally slated for 1,100,00mt of scrap, but the buyer cut down its tonnage in anticipation of a fall in prices.  


The Davis Index for domestic Heavy A was flat at KRW440,000/mt and KRW450,000/mt($408/mt) delivered Incheon and Pohang, respectively. Mills could reduce their bids for domestic scrap next week. But the price decline is expected to be lower than that in the seaborne market, as domestic scrap supply has started to tighten. 

The weekly Davis Index for domestic Light A was flat at KRW422,500/mt delivered Pohang mill. Trades for the grade were reported in the range of KRW420,000-425,000/mt on Monday and Tuesday. Many domestic scrap suppliers are expecting smaller mills to reduce ferrous scrap prices by KRW15,000/mt next week.



The Davis Index for containerized US-origin HMS 1&2 (80:20), Tuesday, settled at $430/mt cfr Taiwan, down by $5/mt. Some offers were heard at $430/mt cfr, down by $5/mt, while bids were at $420/mt on Tuesday. Offers for the grade from Trinidad and Tobago were heard at $425/mt on Monday.


Mills found present price levels unviable due to sluggish finished steel demand as winters have stalled infrastructure projects. Many steelmakers expect a further decline in Turkey’s overseas buying prices. The Turkish Index for US-origin HMS 1&2 (80:20), Monday, fell by $14/mt from Friday to $457.5/mt cfr.


On Monday, Feng Hsin Steel kept rebar and ferrous scrap prices unchanged for the rest of January deliveries. After the revision, the steelmaker’s base price for rebar was at TWD18,900-19,000/mt ex-southern mills. 


The weekly Davis Indexes for domestic HMS 1&2 (80:20) were unchanged at TWD11,450/mt ($408.6/mt), and TWD11,700/mt delivered South Taiwan and North Taiwan mills, respectively. 


The weekly Davis Index for HMS 1&2 (80:20) fell by VND250,000/mt ($10.8/mt) this week to VND8,500,000/mt ($367.7/mt) delivered South Vietnam inclusive of taxes. Sluggish finished steel demand impacted ferrous scrap prices in Vietnam. Mills bought domestic scrap at lower prices. A few deals for HMS 1&2 (90:10) were heard at VND8,75,0000-9,00,0000/mt delivered South Vietnam on Tuesday.



In China, Shagang Steel’s ferrous scrap purchase prices were flat on Tuesday from the prior week. Semi-finished steel prices were also unchanged due to sluggish demand. Iron ore prices on the other hand were firm due to supply constraints, and reached $173.5/mt on Tuesday, up by $2.5/mt from the prior week. Prices are likely to stabilize ahead of the Chinese New Year.  

But traders overseas expect Chinese demand for iron ore and ferrous scrap to sustain for the coming few days. Two small bulk deals were heard for 3,000mt and 2,500-3,000mt of Japanese HS in the range of $500-505/mt cfr China.


The weekly Davis Index for the HMS 1&2 (80:20) settled flat at CNY3,225/mt ($497/mt) delivered mill. Deals for P&S 5ft were heard at CNY4,100-4,150/mt this week. The market was rangebound last week due to limited buying, cold weather, rising COVID-19 cases, and elevated inventories of finished steel.


On Tuesday, prices for Q235 150mm square billets in Tangshan remained unchanged from the prior week at CNY3,810/mt ex-works including 13pc VAT. Southeast Asian billet export offers were under pressure, with buyers from the Philippines bidding at $580-590/mt compared to $600-610/mt in the preceding week. 



The weekly Davis Index for domestic HMS 1&2 (80:20) fell by THB300/mt ($10/mt) to THB11,500/mt ($383/mt) delivered Rayong mill inclusive of taxes, amid limited deals and weak global cues. Many steel mills have piled up inventory and stayed away from fresh purchases. Demand for scrap could remain sluggish due to rising COVID-19 cases and the resulting delays in the commencement of infrastructural projects. Deals for P&S 5ft were heard at THB12,200/mt.


Some Thai exporters who had started offering MS turnings to India at $445-460/mt cfr Nhava Sheva last week, reduced prices to $425/mt cfr on Tuesday. But Indian mills found these prices above workable levels. Exporters were unwilling to lower their offers further due to increased freight costs and container shortage.



The weekly indexes for HMS 1&2 (80:20) fell by MYR60/mt($14/mt) and MYR75/mt to MYR1,415/mt ($350/mt), and MYR1,450/mt delivered western mills and eastern mills inclusive of taxes, respectively.


Mills reduced bids on Tuesday on sluggish demand for finished steel and due to a fall in global scrap prices. Malaysian mills are closely watching Turkish and Chinese ferrous scrap prices before any purchase.


($1=JPY104; TWD28; CNY6.5; THB30; MYR4; VND23,123; KRW1,102)



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