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. Domestic scrap prices rose in Vietnam, Taiwan, Malaysia while remained flat in South Korea, this week


South Korea 

South Korean domestic ferrous scrap prices trended flat this week with Korean mills expected to raise domestic bids amid rising imported scrap offer. Korean steel mills booked Japanese scrap after Kanto bids last week.


The Davis Index for domestic Heavy A, was flat at KRW340,000/mt and KRW345,000/mt ($315/mt) delivered Incheon and Pohang, respectively. Smaller mills refilled inventories 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 flat at KRW327,500/mt delivered Pohang mill. Trades for the grade reported at the index price. Suppliers held material expecting a price hike amid rising global prices.


Hyundai bid for #2HMS at JPY40,000 mt fob Japan, while for HS and shredded at 43,500/mt fob after Kanto bids. The steelmaker booked 60,000mt of Japanese scrap post-Kanto tender. Another deal of 32,000 mt cfr Korea heard from Dongkuk Steel. 


Steel mills in Korea are cautiously buying containerised scrap and not keen on negotiating for bulk scrap due to rising offers.



Taiwanese steelmaker raised rebar prices this week on high input costs. Mills preferred local scrap due to rising imported prices. South Taiwan’s Feng Hsin raised rebar and scrap prices by TWD700/mt and TWD600/mt ($21/mt), respectively, on Monday. After revision, Feng Hsin’s base offers for rebar were at TWD16,700-17,000/mt ex-works southern and northern mills. 


China Steel Corporation (CSC) raised finished steel prices for Q1 2021 by TWD1,200-1,500/mt ($43-53/mt) from the prior set of prices amid high raw material prices and an uptrend in global steel prices. On average, CSC hiked prices by 6.1pc. Steelmaker cited positive business sentiment due to the successful launch of COVID-19 vaccine and strengthening economic activities as the rationale for the price hike.


The weekly Davis Indexes for domestic HMS 1&2 (80:20) Tuesday rose by TWD600/mt to TWD9,350/mt ($332/mt) and TWD9,600/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 $361/mt cfr Taiwan. Most bids were at $350-355/mt, while offers soared to $370-380/mt on Tuesday. Many mills were uncertain of ferrous scrap prices in January and stayed away from booking any containerised scrap.



The weekly Davis Index for HMS 1&2 (80:20) rose by VND17,3750/mt ($7.5/mt) this week to VND7,82,3750/mt ($338.7/mt) delivered South Vietnam inclusive of taxes, with deals heard around the index price. The Vietnamese steel market is gradually recovering and mills have increased domestic scrap purchases and are cautiously bidding for imported amid soaring offers.



In China, Shagang Steel lowered finished steel and ferrous scrap prices by CNY50/mt on Tuesday amid lowering domestic demand in winter. The steelmaker is focusing on exporting billets and rebars. Iron ore prices fell by $5.5/mt from the prior week after a seven-year high to settle at $154.5/mt cfr China. As per market participants, scrap prices might fall further in December due to cold weather and limited demand. 


The weekly Davis Index for the HMS 1&2 (80:20) rose by CNY50/mt ($7.6/mt) to settle at CNY2,800/mt ($436/mt) delivered mill. Deals were also heard for P&S 5ft at CNY2,950/mt this week.


On Tuesday, prices for Q235 150mm square billets in Tangshan fell by CNY50/mt to CNY3,610/mt ex-works including the 13pc VAT. SE Asian billet exports offered at $530-540/mt fob, up by $10/mt from the prior week.


Baosteel raised HRC, CRC prices for domestic January shipment by CNY400/ton and CNY500/ton, respectively, to transfer rise in input costs to consumers. 


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. Most mills and exporters are waiting for January before confirming and ferrous scrap deals.



The weekly Davis Index for domestic HMS 1&2 (80:20) fell by THB50/mt ($1.6/mt) to THB10,300/mt ($343/mt) delivered Rayong mill inclusive of taxes amid cautious buying by Thai mills. Deals for the grade heard at the index price. The imported scrap market remained bullish and a few buyers restocked scrap readily available at the port or domestic yards. Traders said demand for scrap will remain firm and imported prices could rise further in December, which could lift domestic scrap prices. Higher freight charges and a shortage of containers have forced mills to procure domestic scrap, however, domestic supplies too are inadequate adding to the price rise this week.



The weekly indexes for HMS 1&2 (80:20) rose by MYR75/mt ($18.5/mt) to MYR1,175/mt ($290/mt), and MYR1,235/mt delivered western mills and eastern mills including taxes, respectively. With increasing COVID19 cases, productions and demand were effected in Malaysia in the prior week. Steel mills have started raising bids this week and are preferring domestic scrap over high-priced imported scrap, said traders.


Finished steel demand is expected to rise as the virus infections slow down in the country. Lowering iron ore prices and slow billet demand from China are expected to impact Malaysian mills, who could shift focus to domestic demand.


($1=TWD28; CNY6.5; THB30; MYR4; VND23170; KRW1,094.7)

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