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

Asian ferrous scrap buyers preferred domestic scrap as imported prices continued to rise amid tight supply, globally. 


South Korea 

South Korean domestic ferrous scrap prices trended up this week with mills raising domestic bids amid shortage of containers, vessel delays and shortage of import scrap due to lockdown extensions in Europe. 


Korean mills delayed Japanese scrap bookings this week due to rising offers after a deal for #2 HMS 30,000mt was heard at JPY45,000/mt fob Japan on Friday.


The Davis Index for domestic Heavy A rose by KRW15,000/mt($13.65/mt) to KRW440,000/mt and KRW450,000/mt ($409.6/mt) delivered Incheon and Pohang, respectively. Due to a limited supply of domestic scrap, traders are expecting mills to raise bids further by KRW15,000/mt this week.


Smaller mills refilled inventories with domestic scrap amid fears of a further rise in prices due to resumption of ferrous scrap imports by China and firm Turkish buying. The weekly Davis Index for domestic Light A rose by KRW12,500/mt at KRW422,500/mt delivered Pohang mill. Trades for the grade reported at KRW420,000-425,000/mt on Monday and Tuesday. Many domestic scrap suppliers held material on hopes of a further hike on global cues.


In containers, limited offers for Europe-origin HMS 1&2 (80:20) heard at $450-460/mt cfr but no deals confirmed. 



The Davis Index for containerized US-origin HMS 1&2 (80:20), Tuesday, settled flat at $444/mt cfr Taiwan from the prior day. Few offers heard at $445-447/mt cfr, while bids were at $435-440/mt on Tuesday. Traders indicated that rising offers are becoming nonviable amid sluggish finished steel demand in winter.


On Monday, Feng Hsin Steel kept rebar and ferrous scrap prices unchanged for Jan deliveries. The steelmaker’s base price for rebar is at TWD18,900-19,000/mt ex-southern mills. 


The weekly Davis Indexes for domestic HMS 1&2 (80:20) was unchanged at TWD11,450/mt ($409/mt) and TWD11,700/mt delivered South Taiwan and North Taiwan mills, respectively, on Tuesday. Traders said mills are trying to procure more domestic scrap at lower prices than booking imported material due to slow demand from infrastructure and real estate sectors during winter.



The weekly Davis Index for HMS 1&2 (80:20) increased by VND3,500,00/mt ($15/mt) this week to VND8,750,000/mt ($380.5/mt) delivered South Vietnam inclusive of taxes. Deals heard at $8,500,000-9,00,000/mt. Vietnamese mills are cautiously negotiating for imported scrap amid a shortage of domestic scrap and higher offers from Japanese and US-based suppliers.


Mills have increased domestic scrap purchases, while yards are holding back on hopes of better prices in the next few weeks. Few deals for HMS 1&2 (90:10) heard at VND9,00,0000-9,20,0000/mt delivered South Vietnam on Tuesday.



In China, Shagang Steel raised ferrous scrap prices by CNY125/mt ($19/mt) on Tuesday from the prior week. Demand is firm as steelmakers have started importing Japanese ferrous scrap from Jan 1 onwards. Semi-finished prices registered an uptick with iron ore prices reaching $171/mt on Monday, up by $5/mt from the prior week.


Scrap prices might rise further in January due to a rise in demand and a shortage of scrap in the domestic market. Chinese buyers are negotiating ferrous scrap shipments from the US, Australia and Japan, said traders.


The weekly Davis Index for the HMS 1&2 (80:20) rose by CNY125/mt to settle at CNY3,225/mt ($499/mt) delivered mill. Deals for P&S 5ft heard at CNY4,100-4,150/mt this week.


On Tuesday, prices for Q235 150mm square billets in Tangshan remained flat at CNY3,810/mt ex-works including the 13pc VAT from the week prior. SE Asian billet exports offers were under pressure with importers from Philippines bidding at $600/mt cfr this week.



The weekly Davis Index for domestic HMS 1&2 (80:20) rose THB500/mt ($16.6/mt) to THB11,800/mt ($391.7/mt) delivered Rayong mill inclusive of taxes amid firm buying by Thai mills and strong global cues. 


Deals for P&S 5ft heard at THB12,500/mt. Imported scrap market remained bullish and a few buyers restocked scrap from Australia, Hong Kong. Traders said demand for scrap will remain firm and imported prices could rise further pushing up domestic prices. 


Few Thai exporters have started offering Ms turnings to India at $445-460/mt cfr Nhava Sheva, said traders. Sellers are hopeful of deals due to rising freight costs and a shortage of scrap from other regions.



The weekly indexes for HMS 1&2 (80:20) were flat at MYR1,475/mt ($363/mt), and MYR1,525/mt delivered western mills and eastern mills, respectively, inclusive of taxes.


Mills did not raise bids this week and preferred domestic scrap over imported, said traders. Rising iron ore and scrap prices are expected to hurt Malaysian mills who export billets to Asian countries, especially China.


($1=TWD28; CNY6.5; THB30; MYR4; VND22,996.6; KRW1,098)


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