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

Asian ferrous scrap buyers switched to domestic scrap for immediate needs as imported scrap prices continued to rise amid tight supply, globally. Domestic scrap prices rose in Vietnam, Taiwan, South Korea, while remained flat in Malaysia.



Ferrous scrap domestic continued to rise in Japan. Tokyo Steel raised domestic ferrous scrap prices this week. This is the fourth hike in December. Effective Dec 9, Japan’s Tokyo steel raised scrap purchase prices by JPY1,500/mt ($13/mt) at Tahara and by JPY1,000/mt at four other works. New H2 prices at JPY36,000/mt ($346/mt) del Tahara and JPY34,500/mt del Okayama.


South Korea 

South Korean domestic ferrous scrap prices trended up with few Korean mills raising domestic bids amid rising imported scrap offer. Korean steel mills are expected to focus on domestic scrap this week with Japanese domestic scrap and US prices rising further. 


The Davis Index for domestic Heavy A, Tuesday, rose by KRW2500/mt ($2/mt) at KRW340,000/mt and KRW345,000/mt ($318/mt) delivered Incheon and Pohang, respectively, with major steelmakers buying domestic scrap at last week’s prices. Smaller mills hiked bids to increase inventory before mid-December, which is normally an offseason for the construction and real estate sectors.


A few mills preferred lower-priced Light A scrap. The weekly Davis Index for domestic Light A settled up by KRW2500/mt at KRW327,500/mt delivered Pohang mill. Trades for the grade were reported at the index price. Suppliers held material expecting a price hike amid rising global ferrous scrap prices. 


No deals were heard in the bulk market, but traders indicated offers for US-origin HMS 1&2 (80:20) at $370/mt cfr on Tuesday.


Steel mills in Korea are expected to increase production for January export deliveries on the back of healthy Chinese demand.



South Taiwan Feng Hsin raised rebar and scrap prices by TWD300/mt ($10.6/mt) on Monday. Domestic steel mills preferred local scrap due to rising global scrap prices. 


Mills lifted rebar prices this week on high input costs and are expected to raise them further in the coming weeks. After the revision, Feng Hsin’s base offers for rebar were at TWD16,000-16,300/mt ex-works southern and northern mills. 


The weekly Davis Indexes for domestic HMS 1&2 (80:20) Tuesday rose by TWD300/mt to TWD8,750/mt ($310/mt) and TWD9,000/mt delivered South Taiwan and North Taiwan mills, respectively. 


In seaborne markets, the daily index for US-origin containerized HMS 1&2 (80:20) settled flat at $330/mt cfr Taiwan. Most bids were at $325-330/mt, while offers soared to $335-340/mt on Tuesday.



The weekly Davis Index for HMS 1&2 (80:20) rose by VND4,50,000/mt ($19.5/mt) this week to VND7,650,000/mt ($331/mt) delivered South Vietnam inclusive of taxes, with deals heard around the index price. 


The domestic steel market is gradually recovering and mills have increased scrap purchases both from the imported and domestic markets. A $20-25/mt rise in HRC prices and improved rebar sales in Vietnam have led mills to restock ferrous scrap aggressively.



In China, Shagang Steel raised finished steel and ferrous scrap prices CNY110/mt on Tuesday. Rising steel demand coupled with iron ore prices rose at a seven-year high of $147/mt cfr China pushed ferrous scrap prices up in the domestic market. As per market participants, scrap prices might remain stable in December due to cold weather and limited demand. 


The weekly Davis Index for the HMS 1&2 (80:20) settled up by CNY110/mt($16.8/mt) at CNY2,850/mt ($436/mt) delivered mill. Deals were also heard for P&S 5ft at CNY3,000/mt. 


On Tuesday, prices for Q235 150mm square billets in Tangshan rose CNY50/mt to CNY3,660/mt ex-works including the 13pc VAT. SE Asian billet exports offered at $520-530/mt fob, up by $20-30/mt from the prior week. 


There is a lot of ambiguity among market participants around the ban of solid waste imports into China and whether ferrous scrap would be part of the same. Steel mills are waiting for further clarity on the policy. But despite lack of clarity, there were increasing enquiries from Chinese traders for the US and Japanese scrap post the announcement, said traders.



The weekly Davis Index for domestic HMS 1&2 (80:20) rose by THB350/mt ($11.6/mt) to THB10,350/mt ($344/mt) delivered Rayong mill inclusive of taxes amid rising demand. Deals were heard for the grade at the index price. The imported scrap market remained bullish and a few buyers restocked ferrous scrap. 


Imported scrap prices will rise further in December, which traders said will help sell domestic scrap at a higher price. A rise in freight price and shortage of containers has also made mills focus on domestic scrap. Domestic short supply of ferrous scrap too added to the price rise this week.



The weekly indexes for HMS 1&2 (80:20) were flat at MYR1,100/mt ($270/mt), and MYR1,160/mt delivered western mills and eastern mills including taxes, respectively. With increasing COVID19 cases, productions and demand are effected in Malaysia. Steel mills are preferring domestic scrap but a shortage of manpower and logistic constraints due to pandemic has effected scrap purchase.


With rising imported scrap prices, traders are expecting Malaysian domestic scrap prices to rise in December. Finished steel demand is also expected to rise once the virus infections slow. 


Rising iron ore prices and strong demand in China are expected to boost Malaysian appetite for scrap, said market participants. Offers for imported US-origin HMS 1&2 (80:20) rose to $330-335/mt cfr Malaysia on bullish global cues.


($1=TWD28; CNY6.5; THB30; MYR4; VND23170; KRW1,085.6)

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