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

Domestic ferrous scrap prices in most Asian markets trended flat to up. Offers from the US and Europe increased which pushed mills to opt for domestic scrap over imports. Japanese domestic prices have remained flat this week, while export prices rose on global cues. 


South Korea 

South Korean domestic ferrous scrap prices trended flat this week. Hyundai had planned to reduce domestic scrap prices by KRW10,000/mt ($8.9/mt) last week but delayed the decision due to rising import scrap prices. Traders said Koreans might opt out of the market this week too as demand for ferrous scrap remains limited due to high inventory with mills. No deals in containerised or bulk were heard this week. 


The Davis Index for domestic Heavy A delivered Incheon, Tuesday, settled flat at KRW320,000/mt ($284/mt) and KRW315,000/mt delivered del Incheon and Pohang mill, respectively, with deals heard at index price. Most mills preferred lower-priced Light A scrap this week with the weekly Davis Index for domestic Light A settling flat at KRW295,000/mt delivered Pohang mill. Trades for the grade were reported at the index price.



Feng Hsin raised rebar and scrap prices this week by TWD300/mt on Tuesday after three weeks of hiatus. Market participants indicated that mills had to raise rebar prices to offset higher scrap prices. Feng Hsin’s base offers for rebar was at TWD14,900/mt ex-works. 


The weekly Davis Indexes for domestic HMS 1&2 (80:20) in South and North Taiwan were up by TWD300/mt ($6/mt) at TWD7,600/mt ($254/mt) and TWD7,800/mt delivered southern and northern mill, respectively. Offers increased on the back of firm global scrap prices and domestic ferrous scrap shortage.


In seaborne markets, US-origin containerized HMS 1&2 (80:20) offers rose to $278-281/mt cfr Taiwan but no deals heard. Most bids were at $270-275/mt but buyers could give in and raise their bids if scrap prices in international markets continue to rise. The daily index for containerized US-origin HMS 1&2 (80:20) rose by $4/mt to settle at $276/mt cfr Taiwan.


In the bulk market, no deals were heard with steel mills being cautious of rising imported scrap prices and preferred domestic scrap. Taiwanese mills were also negotiating with Russian suppliers for A3 scrap, but deals are yet to be finalized.



The weekly Davis Index for HMS 1&2 (80:20) rose by 5.3pc or VND3,75,000/mt ($16/mt) to settle at VND7,000,000/mt ($301/mt) delivered South Vietnam inclusive of taxes, with limited deals heard at the index price. Shortage of ferrous scrap in the domestic market and rising scrap import offers lifted prices, said traders. Vietnamese mills stayed away from booking imported scrap, while suppliers were not interested in accepting lower bids for bulk shipments.


Mills are gradually increasing domestic and imported scrap purchases amid improving billet prices in China. In the bulk market, an unconfirmed deal for US-origin HMS 1 and 2 (80:20) was heard at $315/mt cfr last week. Containerised imports saw no rise in import volumes as Vietnamese mills focused on bulk scrap purchase.



In China, Shagang Steel raised finished steel prices for November deliveries which impacted ferrous scrap prices as well. The weekly Davis Index for the HMS 1&2 (80:20) settled at CNY2,680/mt ($399/mt) delivered mill, down by CNY5/mt from the prior Tuesday. As per traders, ferrous scrap prices were down by CNY10/mt in the early part of the week but improved due to rising demand for billets.


Prices for Q235 150mm square billets in Tangshan, North China’s Hebei province rose by CNY20/mt to CNY3,430/mt ex-works including the 13pc VAT. Few small rebar manufacturers resumed production after pausing operations for around 15 days to control pollution. Chinese September steel output rose by 0.9pc from the previous month as mills ramped up production to meet demand from infra projects. 


The Chinese government also took steps to grade domestic steel scrap, which is expected to improve ferrous scrap supply and market in the long run. Market participants expect this to curb the supply of low-quality scrap into the Chinese market and increase scrap prices. Lowering iron ore prices in the international market might impact scrap prices negatively but traders expect long term prices to be positive.


China’s GDP rose by 0.7pc in October after slow growth amid the COVID-19 pandemic.



The weekly Davis Index for domestic HMS 1&2 (80:20) rose by THB350/mt ($11/mt) at THB9,500/mt ($304/mt) delivered Rayong mill inclusive of taxes. Deals were heard for the grade at the index price. 


Mills increased domestic scrap purchases to avoid higher-priced imported scrap. A few trades for South American HMS 1&2 (80:20) heard at $280-285/mt cfr this week with offers rising further to $290-295/mt cfr. Traders expect scrap volumes to rise in the coming weeks with a firm demand for billets in China. 


Deals were also heard for P&S 5ft at THB9700/mt on Tuesday. 


Sluggish domestic steel demand is still a cause of concern for many mills in Thailand.



The weekly indexes for HMS 1&2 (80:20) fell by MYR100/mt($24/mt) and MYR75/mt to MYR1,000 /mt ($240/mt), and MYR1,100/mt ($264/mt) delivered western mills and eastern mills including taxes, respectively. Scrap prices fell as Malaysia extended the pandemic-related lockdown. Steel mills are expected to delay the purchase of ferrous scrap amidst production challenges and sluggish domestic demand for finished steel.


No trades were heard in the import market, but demand for ferrous scrap could rise in the coming weeks as per traders. Offers for US-origin HMS 1&2 (80:20) rose by $10-15/mt to $270-280/mt cfr.


($1= JPY104.6; TWD28.7; CNY6.7; THB31; MYR4.16; VND23.1; KRW1,138)


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