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

Domestic ferrous scrap prices in most Asian markets were on downtrend amid weak finished steel demand. Prolonged inactivity and increasing supplies further pressured prices. Steel mills held back buying due to national holidays. With Japanese domestic scrap price under pressure, market participants expect offers to fall this week.


South Korea 

South Korean domestic ferrous scrap prices rose this week on limited supplies, while due to holidays mills stayed away from any major buying. Chuseok holidays have ended but buyers are yet to return for new bookings, said local traders. As expected, Hyundai and other mid-size mills bought limited quantities. Buyers have opted to wait before resuming imported scrap bookings as finished steel demand remains sluggish in Korea. 


The Davis Index for domestic Heavy A delivered Incheon and Pohang, Tuesday, settled up by KRW5,000/mt ($4.30/mt) and KRW15,000/mt ($12.91/mt) at KRW320,000/mt ($276/mt) delivered mills, respectively, with major steel mills like Hyundai, Dongkuk and others buying limited scrap at index prices.


The weekly Davis Index for domestic Light A fell by KRW5,000/mt to KRW275,000/mt delivered Pohang mill. Limited trades for the grade were reported at the index price as mills focused on buying special grades for high alloy making purposes. 



Rebar and ferrous scrap prices were flat in Taiwan Tuesday amid slow trading activities due to holidays. Steelmaker Feng Hsin Steel anticipates a further drop in prices in the coming days. Feng Hsin’s base offers for rebar was at NT$14,600/mt ex-works. 


The weekly Davis Indexes for domestic HMS 1&2 (80:20) in South and North Taiwan was flat at NT$7,125/mt ($248/mt) and NT$7,300/mt delivered mill, respectively, on Tuesday, from the prior week. 


In seaborne markets, US-origin containerized HMS 1&2 (80:20) offers dropped to $273/mt cfr Taiwan with no deals heard. Bids for the same grade dropped to $268/mt. The daily index for containerized US-origin HMS 1&2 (80:20) settled down by $2/mt at $271/mt cfr Taiwan, from a day prior. Offers for HMS 1 &2 (90:10) were at $272/mt, while no deals heard. 


Market participants are expecting bids to lower to $265/mt by this weekend as mills avoid bookings during the holiday week. Offers for South American scrap were at $260/mt cfr Taiwan, flat from a week ago.




The weekly Davis Index for HMS 1&2 (80:20) was flat at VND6,437,500/mt ($277/mt) delivered South Vietnam, inclusive of taxes, with limited deals heard at index prices. Index went up by $1/mt due to depreciation of Vietnamese dollar this week. Vietnamese mills remained cautious of bookings imported scrap expecting prices to drop further in the coming days.


Mills were under pressure as low-priced HRC offers from China pulled down domestic sentiments. Most mills have high HRC inventory and have reduced scrap buying for the week as they may slow production. With offers for US-origin ferrous scrap falling, Vietnamese buyers could wait for a further correction before buying scrap.


In the bulk market, a deal for Japanese #2 HMS was heard at JPY26,500-27,000/mt($250-255/mt) fob. Vietnamese billet exports took a halt due to Golden festival in China. Offers for billets were at $445-455/mt cfr China, while no bids were heard due to holidays.



In China, Shagang Steel lowered domestic finished steel prices for October deliveries and lowered domestic scrap prices too. The weekly Davis Index for the grade settled at CNY2,635/mt ($388/mt) delivered mill down by CNY15/mt from prior Tuesday. The dollar delivered mill price remained the same at $388/mt from the week prior due to currency fluctuation.


Prices for billets in the domestic market were at CNY3,300/mt ex-Tangshan mill on Tuesday, down by CNY30/mt from a week earlier. Trades have come to a halt as steel mills will not place fresh booking during the Golden week festival in China. Market participants said that domestic scrap prices in China are expected to remain on a downtrend in the coming week with traders expecting iron ore prices to fall after holidays.



The weekly Davis Index for domestic HMS 1&2 (80:20) rose by THB50/mt ($1.6/mt) and settled at THB9,150/mt ($293/mt) delivered Rayong mill inclusive of taxes as traders were not willing to reduce prices further. Mills have stopped purchases from last two weeks as they have ample inventory. Old contracts are being fulfilled, said traders. Sluggish finished steel demand this week added to the woes of traders sitting with high inventories of imported scrap.


With most Asian markets in a holiday mood, Indonesian importers are expected to reduce bids for billets to $430-435/mt.




The weekly indexes for HMS 1&2 (80:20) rose by MYR90/mt($20/mt) and MYR35/mt to MYR1,015/mt($244/mt) and MYR1,040/mt ($250/mt) delivered western mills and eastern mills including taxes, respectively. A shortage of local scrap has lifted offers and traders refuse to sell at lower prices. No trades were heard in the import market. 


Market participants are expecting demand for finished steel to remain subdued amid delays in new infrastructural and real estate projects. Traders expect domestic ferrous scrap prices to fall in line with global cues. Offers for US-origin HMS 1&2 (80:20) were heard at $255-260/mt cfr.


 ($1= JPY105.7; TWD28.7; CNY6.8; THB31.3; MYR4.15; VND23,185; KRW1,157)

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