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

Mills in South Korea, Taiwan and Vietnam raised bids for domestic scrap amid higher prices and delays in securing imported scrap. Demand for domestic scrap is driven by a rise in freight rates, container shortages and anticipation of more Turkish buying this week for May deliveries.


Asian buyers raised bids for imported and domestic scrap on the expectation of a rise in Turkish buying. The Davis Index for US-origin HMS 1&2 (80:20), Monday, was flat at $425.44/mt cfr Turkey from Friday.


A rise in Chinese steel futures on Tuesday indicates stable demand in Asia and scope for a further rise in raw materials prices. While on the other hand, there is a huge backlog of past orders in the seaborne scrap market due to the unavailability of empty boxes at exporter destination, especially in the USWC. 


South Korea 

South Korean mills raised domestic scrap bids by KRW10,000-20,000/mt ($9-18/mt) on Tuesday. Major steel mills were negotiating for bulk deals from Australia, Russia and the US instead of containerised to avoid delays.


The weekly Davis Index for domestic Heavy A rose by KRW10,000/mt to KRW435,000/mt ($388/mt) and by KRW20,000/mt to KRW455,000/mt delivered Incheon and Pohang, respectively. Mills have raised new bookings due to low inventory, said traders.


The weekly Davis Index for domestic Light A rose by KRW20,000/mt to KRW430,000/mt delivered Pohang mill. With the current rise in buying prices in Turkey and China, mills are expected to remain cautious and closely watch purchases by other Asian countries.



The daily Davis Index for containerized US-origin HMS 1&2 (80:20), Tuesday, rose by $5/mt to $413/mt cfr Taiwan from Friday. From the prior Tuesday, the index gained $10/mt as Taiwanese mills raised bids after return from Qingming festival holidays. Most yards are expecting a further rise this week as mills are low on inventory and are expected to raise bids for domestic scrap as well. Offers rose by $5-10/mt cfr from Friday to $415-420/mt cfr on Tuesday amid container shortage and vessel delays. 


The weekly Davis Indexes for domestic HMS 1&2 (80:20) rose by TWD200/mt($7/mt) to TWD10,700/mt ($367.5/mt) and TWD10,900/mt delivered South Taiwan and North Taiwan mills, respectively. Feng Hsin raised domestic scrap bids by TWD200/mt on Tuesday while kept rebar offers flat at TWD18,400/mt ex-works.


On Tuesday, few offers for HMS 1&2 (70:30) from Central America in FEU heard at $395-400/mt cfr up $5-10/mt from the prior week. Taiwanese importers indicated that domestic scrap is still cheaper than imports, but supply remains tight.



The weekly Davis Index for domestic HMS 1&2 (80:20) rose by VND215,000/mt ($9/mt) to VND9,000,000/mt ($390/mt) delivered South Vietnam inclusive of taxes. Some traders expect bids to rise further on improved finished steel demand and higher raw material prices globally. 


Bulk HMS 1&2 (80:20) offers from the US west coast rose to $450-455/mt cfr Vietnam up $5-10/mt from the week prior. Most mills opted to bid for bulk over containerised due to a shortage of empty boxes at supplier destinations. A few deals for busheling in the domestic market were at VND9,700,000/mt delivered South Vietnam on Tuesday.



In China, Jiangsu Shagang Group lifted prices of long and flat finished steel products by CNY100-300/mt ($15-46/mt) for early April deliveries amid stable raw material prices. The hike also comes in line with China’s top economic council reiterating the resolve to lower crude steel output in 2021. 


Iron ore prices for 62pc Fe were stable at around $168/mt cfr Qingdao on Monday from the prior week. With bullish steel, coal and iron ore futures and stricter production curbs, market participants expect good demand for ferrous scrap in the coming days. 


Mills could also focus on importing billets to fulfil domestic and international finished steel demand. Production restrictions and rising demand for finished steel pushed domestic billet prices to a 12.5 year high of CNY4,960/mt($757/mt) ex-mill, up CNY180/mt from the prior week.


The weekly Davis Index for the HMS 1&2 (80:20) was flat at CNY3,425/mt ($523/mt) delivered mill from the prior week. Bids for imported scrap rose following the limited availability of domestic scrap. 



The weekly Davis Index for domestic HMS 1&2 (80:20) rose by THB300/mt ($9.6/mt) to THB12,900/mt ($411/mt) delivered Rayong mill inclusive of taxes. Deals were reported at THB12,800-13,000/mt delivered mill. Mills raised procurement for domestic scrap amid imported scrap shortage and rising freight. 


A leading exporter in the US confirmed that a Thailand-based steelmaker may buy higher volumes amid a shortage of raw material from Australia and other nearby regions. 


Deals for domestic P&S 5ft heard above THB13,500-13,800/mt on Tuesday, with mills preferring domestic scrap or imported billets. Deals for billets were heard at $640-650/mt cfr Thailand and China up $20-30mt from the prior week. Demand, however, has been limited as buyers decided to wait for more clarity on the price direction. 



The weekly indexes for HMS 1&2 (80:20) rose by MYR20/mt to MYR1,520/mt ($368/mt), and MYR1,550/mt delivered western mills and eastern mills inclusive of taxes, respectively. Offers for domestic P&S 5ft at MYR1,850-1,880/mt delivered mill on Tuesday.


Malaysia has imposed a 15pc duty on exports of ferrous scrap. Through this duty, the government aims to restrict ferrous scrap exports and secure material for domestic producers. This could lower the country’s dependency on imports, while many traders expect higher demand for domestic scrap in the coming weeks, thereby spiking bids.


Limited offers for US-origin HMS 1&2 (80:20) in FEU at $405-410/mt up $10-15/mt from the prior week on global cues. Steel mills preferred domestic scrap as it remained competitively priced against imports.


($1=JPY108.72; TWD28.5; CNY6.5; THB31.4; MYR4; VND23,060; KRW1,121)

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