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

Domestic ferrous scrap prices in most South East and East Asian markets rebound this week driven by a rise in Japanese scrap prices and strong sentiments in the global markets. Scrap prices dropped only in South Korea where mills resisted higher offers on subdued finished steel demand.



Japan’s domestic ferrous scrap prices recovered and continued to firm up in line with rising export prices. Most EAF makers in Kanto region have raised their scrap purchase bids by JPY500-1,000/mt ($4.66-9.32/mt) from the prior week as suppliers refused to trade at the lower levels.


Though Tokyo Steel has held domestic scrap purchase prices flat at all its plant since July 17, expect at Kanto region’s Utsunomiya mill were it increased bid by JPY500/mt. The steelmaker has scheduled BF maintenance activities amid low demand.  


Tokyo’s purchase prices for #2 HMS are at JPY22,000/mt ($205/mt) delivered Utsunomiya mill. Bids for #2 HMS and busheling are at JPY23,500/mt and JPY25,000/mt delivered Kyushu and JPY23,000/mt and JPY24,000/mt delivered Okayama mill, respectively.  


South Korea  

South Korean domestic scrap prices dropped further amid high scrap inventories at the mills. Dongkuk, SeAH, YK, Daehan and Hyundai Steel lowered their domestic scrap purchase prices by KRW5,000/mt ($4.18/mt) del mill for the fourth successive week.


The Davis Index for domestic Heavy A Tuesday fell by KRW5,000/mt to settle at KRW285,000/mt ($238/mt) del Incheon, while the index in Pohang settled at KRW270,000/mt delivered, down by KRW5,000/mt from the prior Tuesday.  

The weekly Davis Index for domestic Light A settled at KRW240,000/mt delivered Pohang mill, down by KRW5,000/mt. A few mills are still paying KRW245,000/mt delivered mill for light A scrap procured domestically for their immediate needs.  


In seaborne markets, a leading steelmaker Daiken Steel booked #2 HMS at JPY24,000/mt fob Japan, up JPY1,000/mt from the late last week prices. Another steelmaker is expected to place purchase tender for imported scrap on Tuesday amid indications of higher prices. Domestic scrap prices are expected to have reached short-term bottom, said a trader.  



Domestic ferrous scrap prices in Taiwan remained flat to up this week. Though domestic scrap, billet and rebar prices remained flat so far, demand is in Taiwan expected to improve in the coming days on high global finished steel sales prices.


The weekly Davis Index for domestic HMS 1&2 (80:20) in South Taiwan Tuesday settled at TWD6,650/mt ($226/mt) del mill flat from the prior week. The index for HMS 1&2 (80:20) in North Taiwan settled at TWD6,850/mt del mill, up TWD50/mt. Few yards have raised their expectation due to high imported scrap that recovered by $10-15/mt in the last two weeks.


Feng Hsin Steel kept domestic base HMS 1&2 (80:20) prices at TWD6,800/mt delivered Taichung mill. The steelmaker’s base offers for rebar and billet was flat at TWD13,800/mt and TWD12,300/mt ex-works. Some mills offered discounts on listed prices to boost demand.


In seaborne trades, US and Australia-origin containerised HMS 1&2 (80:20) traded at $240-245/mt cfr Taiwan, up from $235-238/mt cfr Taiwan last week. Japanese small bulk cargoes of HMS 1&2 (50:50) offered $255/mt cfr Taiwan, while shredded traded at $270-275/mt cfr Taiwan, according to a trader.  



The Davis Index for HMS 1&2 (80:20) settled at VND5,850,000/mt ($252/mt) delivered South Vietnam, inclusive of taxes, up by VND50,000/mt from the prior week. Imported scrap prices from the leading supplier Japan have started rising. Also, Vietnamese HRC prices increased by another $20-30/mt for September shipments as major steelmakers Hoa Phat and Formosa hiked the domestic sales prices.  



In China, Shagang Steel raised bids for domestic #2 HMS (6-10mm thickness) by CNY30/mt to CNY2,750/mt del Jiangsu mill, inclusive of 13pc VAT. The weekly Davis Index for domestic HMS 1&2 (80:20) settled at CNY2,750/mt ($393.39/mt) delivered to mill in eastern China, inclusive of 13pc VAT, up by CNY50/mt. Shagang Steel held rebar prices flat for mid-July shipments.  

In the domestic market, prices for billet declined by CNY30-40/mt from the last week to CNY3,370/mt ($482/mt) ex-Tangshan mill on Tuesday.  



The weekly Davis Index for domestic HMS 1&2 (80:20) inched up by THB50/mt ($1.58) to settle at THB7,750/mt ($244.6/mt) delivered Rayong mill, inclusive of taxes. Major steelmakers stayed away from scrap bookings amid weak steel demand in the country.  



The weekly Davis Index for domestic HMS 1&2 (80:20) rose by MYR20/mt from the prior week in line with rising imported scrap and iron ore prices. The indexes settled at MYR950/mt ($222.9/mt) delivered western mills and at MYR970/mt delivered eastern mills, inclusive of taxes.  


($1= JPY107.26; TWD29.45; CNY6.99; THB31.68; MYR4.26; VND23,181.5; KRW1,196.26)


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