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

Imported ferrous scrap prices in Asia increased on bullish global cues and rising freight charges. Sellers believe prices could rise in May on a further hike in freight charges.



The daily Davis Index for US-origin containerized HMS 1&2 (80:20), Thursday, was unchanged at $432/mt cfr Taiwan, with limited trades heard for containerized scrap. Offers remained high at $435-440/mt cfr as bids kept chasing rising offers. The index rose by $8/mt from the prior Thursday (April 8).


Market participants indicated that offers might rise next week due to global scrap shortage and rising demand from other Asian countries. Mills raised domestic scrap bids to avoid any shortfall and were closely watching South Korean and Vietnamese bulk scrap purchase from Japan before negotiations.


Offers for Japanese HMS 1&2 (50:50) rose by $10/mt to $460/mt cfr Taiwan while bids were at $450/mt cfr. Traders said most mills are yet to raise bid and are cautious of rising scrap prices in the international markets. Offers are expected to rise further post bullish Kansai tender bids on April 13.


On a weekly basis, the Davis Indexes for containerized #1 HMS, shredded and P&S 5ft rose by $9/mt, $3/mt, $4/mt to $442/mt, $448/mt, $459/mt cfr, respectively, from April 8. The index for #1 busheling remained flat this week at $464/mt cfr amid lower demand for higher grade scrap, said traders. 


Mills are cautiously watching Turkish and Chinese buying trends. With Turkey holding back purchases during Ramadan holidays, Taiwanese mills are cautiously checking South Korean and Vietnamese deep-sea purchase to gauge the market trend post-Kansai tender. 



Vietnamese mills lowered containerised scrap purchases and preferred to buy bulk from Japan and Hong Kong amid a shortage of empty shipping containers and rising freight. Mills were in negotiations for deep-sea cargo from the US, but with offers rising to $475-480/mt cfr, trades are yet to be heard. 


Mills are checking Turkish purchases, but no deals were heard due to the Ramadan holidays. The Turkish index for HMS 1&2 (80:20), Wednesday, fell by $5.7/mt from the prior week (April 8). Turkish mills have suggested prices should decrease by $5-10/mt citing oversupply.


In the containers market, the weekly index for US-origin HMS 1&2 (80:20), Thursday, rose by $9/mt to $440/mt cfr Vietnam from the prior week. Bids rose by $5/mt to $435/mt, while offers rose $5-10/mt to $440-445/mt cfr in TEU containers, said traders citing higher freight charges. Limited trades were heard from USWC at $440/mt cfr this week.


On a weekly basis, the Davis Indexes for containerized #1 HMS rose by $9/mt to $448/mt cfr. Shredded, P&S 5ft and #1 busheling 5ft remained flat from the prior week with more demand for short transit scrap from Hong Kong and Singapore. 


Robust steel demand in China boosted higher exports of billets and other semi-finished products from Vietnam and also leading to an increase in production by major domestic steelmakers. In March, China was the top destination for Vietnamese exporters with iron and steel exports to China nearly tripling from a year ago. Exports were up by 192pc at 270,790mt from the prior March and up by 177pc from February. Higher steel prices in China’s domestic market and shorter transit also allowed importers of steel to gain arbitrage opportunity. 


Billet prices from Asian suppliers have increased by $25-30 in a month as domestic billet prices in China rose to a 12.5 year high amid production cuts. A recent deal for billets concluded at $660/mt cfr China. 


In April, HRC offers to Vietnam spiked in line with higher HRC prices in the international market. Last week, a deal for Indian HRC was heard at $920-930 cfr Vietnam with offers expected to rise further


In small bulks, offers for Japanese #2 HMS rose by $10/mt to $460-465/mt cfr but no deals heard at higher prices. 



The Davis Index for HMS 1&2 (80:20) settled flat at $441/mt cfr Jakarta with mills buying limited scrap and preferring short transit origins for immediate requirement during Ramadan.


Indonesian mills have been slow in new bookings. Trades for P&S 5ft from Singapore heard at $460/mt cfr and HMS 1&2 (80:20) from New Zealand at $440/mt cfr. Bids chased limited offers this week. Offers for Australian HMS 1&2 (80:20) at $445-450/mt cfr on Thursday.


Market participants expect trade to remain slow next week due to Ramadan holidays but offers for containerised could rise on higher freight rates and container shortage.


The weekly index for P&S 5ft fell by $1/mt to $460/mt cfr from the prior week due to limited offers and bids for US-origin scrap. The Davis Index for shredded remained flat at $451/mt cfr Jakarta on Thursday with mills resisting higher offers this week. 


Deals for domestic busheling heard at $470/mt delivered Jakarta mill amid rising demand for domestic scrap for immediate requirement. Imports from Malaysia remained paused following the announcement of a 15pc export duty on ferrous scrap.

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