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

Imported scrap prices in East and Southeast Asian markets rose from the prior week with US-based suppliers raising offer prices despite limited demand. Asian buyers remain wary of buying at higher prices.



The Davis Index for containerized US-origin HMS 1&2 (80:20) settled flat at $303/mt cfr Taiwan from the prior day, while it rose by $10/mt from the prior week (Nov 12). A few deals were heard at $305/mt cfr this week. Many small mills held their bids at $295/mt cfr. 


Finished steel prices remained flat for the second week and are likely to rise to offset increased input costs. Domestic ferrous scrap price is also likely to move up amid higher imported offers. As per market participants, Taiwanese mills are focusing on domestic scrap market and are unlikely to accept higher domestic scrap offers. Finished steel demand is stable but margins are squeezed. Till steel prices don’t move up, mills won’t buy at higher prices, said traders.


US-based yards offered HMS 1&2 (80:20) in FEUs at $310/mt cfr. Prices are expected to rise with increased buying by Turkish importers. The Davis Index for US-origin HMS 1&2 (80:20) in Turkey rose by $20/mt on Wednesday from Nov 12. While demand is limited, rising offers are pushing ferrous scrap prices up.


Steelmaker Feng Hsin focused on purchasing domestic and South American scrap at lower prices to avoid high imported offers.

The weekly Davis Indexes for containerized P&S 5ft, #1 HMS, shredded and #1 busheling rose by $17/mt, $10/mt,$10/mt, and $21/mt to $330/mt cfr, $308/mt cfr, $318/mt cfr, and $339/mt cfr, respectively. No deals were heard for above grades as mills were wary of rising offers.


In the bulk market, offers for Japanese HMS 1&2 (50:50) were at $330/mt cfr, up by $10/mt from the week prior. Offers rose amid limited buying. 



In the containers market, the weekly index for US-origin HMS 1&2 (80:20) settled at $311/mt cfr Vietnam on Thursday, up by $14/mt. US-based suppliers offered the grade at $315/mt cfr, but no deals were heard. Bids by other Asian countries were more lucrative and thus, sellers largely stayed away from the Vietnamese market.


Vietnamese mills negotiated for Japan and US-origin material in bulk. Japanese ferrous scrap export prices also started rising this week post the Kanto and Kansai bids. Higher prices limited trades.  


The weekly index for P&S 5ft and shredded rose by $16/mt and $10/mt to $335/mt cfr and $325/mt cfr, respectively, on Thursday. Vietnamese mills are inquiring for higher grades scrap, said traders. Offers for P&S 5ft in TEU were at $340/mt with no buying at these levels. 


In the containers market, prices for #1 busheling rose by $19/mt to $350/mt cfr from a week ago, and offers of $350/mt cfr in TEU were unacceptable for buyers.


In the bulk market, Davis Index heard two US-origin HMS 1&2 (80:20) deals at $340-341/mt cfr Vietnam this week. Offers rose on Thursday to $350-355/mt with no deals yet. Deals were also heard for Japanese #2 HMS at $335/mt cfr on Wednesday, while Hong Kong-origin HMS 1&2 (50:50) sold at $323/mt cfr on Friday.



Indonesian mills booked cautiously amid high US-origin offers. Market participants are expecting scrap prices to rise further next week. The difference between offers and bids in Indonesia is currently around $10/mt cfr. The weekly Davis Index for HMS 1&2 (80:20) rose by $29/mt to $335/mt cfr Jakarta. Offers rose to $340/mt cfr Jakarta on Thursday, with bids at $330/mt cfr.


The indexes for P&S 5ft and #1 HMS rose by $24/mt and $29/mt to $349/mt cfr and $340/mt cfr Jakarta, respectively. Deals for P&S 5ft were heard at $345/mt on Monday, while offers moved up to $355/mt on Thursday, with no deals heard.


The weekly Davis Index for #1 busheling settled up by $21/mt at $356/mt cfr. No deals were heard for the grade as most mills restrained from buying at higher offers. 


The weekly Davis Index for shredded rose by $26/mt cfr to $345/mt cfr. Mills enquired shredded amid rising demand for billet from China but due to rising demand from Turkey, global scrap prices rose much higher than expected as per market participants. 



Japan’s leading EAF steelmaker Tokyo Steel announced third successive price hike in a week’s time. The first two were on Nov14 and Nov 17. Effective Nov 20, Tokyo steel raised ferrous scrap purchase prices by JPY1,000/mt ($9/mt) at three plants, Tahara, Okayama and Kyushu. Revised #2 HMS price are at JPY31,000/mt ($298.5/mt) delivered plant Tahara and Okayama.


This marked the sixth successive scrap price hike in November. The steelmaker has also raised finished steel prices for December deliveries by JPY2,000/mt ($19/mt) following bullish global cues and a sharp rise in domestic scrap prices.



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