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

Imported ferrous scrap prices continued their downtrend in Asia following weak global cues amid rising supply and slow steel demand. Few sellers believe prices might have bottomed and could rise next week. 



In the Japanese domestic market, Tokyo Steel reduced ferrous scrap price for the second time this week. The steelmaker reduced ferrous scrap purchase prices by JPY500/mt ($4.6/mt) delivered Utsunomiya plant, effective March 26. However, bids remained unchanged for all other works. Earlier this week, the steelmaker lowered bids by JPY500/mt ($4.6/mt) delivered Tahara and Utsunomiya mill, effective March 23.


Revised bids for domestic #2 HMS at JPY41,000/mt ($377/mt) delivered Tahara, JPY40,500/mt delivered Okayama, JPY41,000/mt delivered Kyushu, JPY40,000/mt delivered Utsunomiya and JPY39,500/mt delivered Takamatsu.


South Korea 

Hyundai steel, Thursday, cut bids for all grades of ferrous scrap by JPY2,000/mt ($18/mt) from the prior bids of March 11. The steelmaker bid for #2 HMS at JPY40,000/mt (367/mt) fob Japan and skipped bidding for H1:H2 scrap.


Bids for higher-grade scrap like HS equivalent to P&S, shindachi and shredded grades are at JPY45,000/mt, JPY45,000/mt and JPY44,000/mt fob Japan. 


According to sources, bids from Hyundai Steel are higher-than-expected. A few buyers targeted JPY39,000-39,500/mt fob Japan levels. 


Hyundai is also negotiating for a bulk cargo of 30,000-35,000mt A3 scrap from Russia at $425/mt cfr South Korea. 



The daily Davis Index for US-origin containerized HMS 1&2 (80:20), Thursday, inched down $1/mt to $391/mt cfr Taiwan with bids dropping to $380-385/mt cfr amid sluggish demand. US-based exporters reduced offers by $15-20/mt amid improving supply, yet most resisted offer below $395/mt cfr Taiwan due to high freight rates and shipping challenges. The index fell by $14/mt from the prior Thursday (March 18).


Few Taiwanese mills bid for Japanese HMS 1&2 (50:50) at $410-415/mt cfr Taiwan while offers were at $425-430/mt cfr from the prior week. Traders said most mills are yet to bid and are cautious of falling scrap prices in the international markets.


On a weekly basis, the Davis Indexes for containerized #1 HMS, shredded, P&S 5ft and #1 busheling fell by $13/mt, $14/mt, $13/mt and $12/mt to $397/mt, $406/mt, $418/mt and $428/mt, respectively, from March 18. 


Mills have turned cautious amid slow finished steel demand and are focusing more on bulk scrap over containerised due to a shortage of containers and vessel delays.



Vietnamese mills remained silent for containerised deals and preferred to buy bulk scrap from Japan due to a short supply of empty containers. Mills are waiting for Turkish bulk purchases to resume as the Turkish index for HMS 1&2 (80:20) is below $420/mt cfr Turkey.


In the containers market, the weekly index for US-origin HMS 1&2 (80:20), Thursday, fell by $12/mt at $398/mt cfr Vietnam from the prior week. Mills bids at $390-395/mt, while trades reported in the range of $395-400/mt cfr in TEU’s containers.


On a weekly basis, the Davis Indexes for containerized #1 HMS, shredded, P&S 5ft and #1 busheling fell by $13/mt, $14/mt, $13/mt and $12/mt to $403/mt, $413/mt, $425/mt and $433/mt, respectively, from March 18.


In small bulks, trades for Japanese #2 HMS concluded at $435/mt cfr, while offers heard at $440-445/mt cfr on Thursday, despite drop in fob prices in Japan increased freight rates kept cfr prices high. The USWC based yards offered bulk at $445-455/mt cfr Vietnam with bids falling further to $435-440/mt cfr this week.



Indonesian mills remained mostly in wait-and-watch mode and limited their bookings amid falling global ferrous scrap prices. Many exporters are still processing export registration amid delays. Traders said that the unavailability of containers and weak domestic steel demand kept sentiments bearish. Mills preferred Hong Kong oversized P&S with bids at $420-425/mt cfr this week. Chinese bids for Japanese HS heard at $460-465/mt cfr stable this week.


The Davis Index for HMS 1&2 (80:20) settled at $405/mt cfr Jakarta, down $10/mt from the week prior. No deals heard with bids falling in anticipation of a drop in scrap prices.


The weekly indexes for P&S 5ft and shredded fell by $13/mt and $12/mt to $425/mt cfr and $418/mt cfr Jakarta, respectively. Offers for Australia and the UK origin P&S 5ft fell by $20/mt to $425-430/mt cfr, while bids were at $415-420/mt cfr. Many traders indicated that mills are cautious of falling prices and waiting for prices to hit bottom.


The weekly Davis Index for #1 busheling fell by $10/mt to $435/mt cfr Jakarta with mills preferring domestic scrap. There is a shortage of premium grades amid stalled auto production. Automakers have announced production cuts due to a shortage of semiconductors, globally. On Thursday, bids for domestic busheling heard at $430-435/mt delivered Jakarta mill.


After a long gap, a major mill is heard to have booked large tonnages of shredded at $435/mt cfr Thailand. Imports from Malaysia remained paused amid the announcement of 15pc export duty on the ferrous scrap. 


($1=JPY108.7, TWD28.5, VND23,240)

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