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

Ferrous scrap demand recovered as buyers rushed to secure material before offers move up further while higher freight charges continue to spike landed price of ferrous scrap in Asia.



Japanese ferrous scrap exporters have raised their offers but demand in the seaborne market remained lower than the domestic market. Domestic consumers are actively restocking scrap paying JPY2,000-2,500/mt more than the prior week. Golden week holidays in Japan are expected to keep activities slow from April 29 to May 5. 


Amid the ongoing emergency to curb COVID-19 resurgence, Tokyo steel continues to hold ferrous scrap purchase prices unchanged from April 21. South Korean mills remained away banking on surplus domestic availability and on-hand inventory. 


Mills are expected to revise their bids for Japanese scrap which lag by at least JPY2,500-3,000/mt from current offers and even lower than domestic trade levels. Expecting higher demand from China, mills could restock ferrous scrap soon. 



The Davis Index for US-origin containerized HMS 1&2 (80:20), Thursday, settled at $433/mt cfr Taiwan up $4/mt from April 22 following rising offers. Offers remained high and in very limited numbers as supply from yards tightened. Offers rose after China cancelled rebates on steel exports which could boost global steel prices further in the coming days. Early week, deals for HMS 1&2 (80:20) reported at $423-425/mt cfr Taiwan in FEU’s from the US.


Taking cues from the Turkish market, mills in Taiwan are anticipating active demand in the bulk market as Ramadan nears completion. In Turkey, despite the lockdown, a couple of bulk trades concluded at prices higher than prior deals. 


In South Asia, mills have drawdown scrap inventories and expected to restart booking as countries start implementing massive vaccination drives against COVID-19.


Offers for Japanese HMS 1&2 (50:50) surged by $10/mt to $465-470/mt cfr Taiwan while bids at $455-460/mt cfr Taiwan. There is a gap of over $20-25/mt between HMS imported from Japan and the US, this would push the US offers further, believe traders.


On a weekly basis, the Davis indexes for containerized #1 HMS, shredded rose by $5/mt and $2/mt to $443/mt and $450/mt cfr Taiwan, respectively, from April 22. Mills opted for US-origin material amid a sharp rise in Japanese offers. Freight charges for small bulk from Japan have risen by over $10-15/mt in a week. 


While the indexes for P&S 5ft and #1 busheling rose by $2/mt and $4/mt to $458/mt and $468/mt cfr Taiwan amid increasing demand for higher grade scrap this week, traders said. 


Export rebate cancellation and waiving off of import duties on billet, ferrous scrap from non-ASEAN countries is expected to boost Chinese imports. Suppliers are keen to take advantage of the intense competition for scrap in the overseas market. 



The weekly index for containerised US-origin HMS 1&2 (80:20), Thursday, rose to $441/mt cfr Vietnam up $3/mt from the prior week. Bids rebounded in the latter half of the week by over $10/mt following a jump in offers from Japan and the US. An uptick in freight charges limited trades from USWC as mills opted for domestic scrap. In the US domestic market, expectations remain strong for May trades. 


Importers are negotiating for US-origin bulk with offers for shredded above $475-480/mt cfr Vietnam. Amid tight supply, a mill is heard to have bought Japanese busheling at $525-530/mt cfr Vietnam. 


On a weekly basis, the Davis indexes for containerized #1 HMS rose, Thursday, by $2/mt to $448/mt cfr Vietnam. Shredded, P&S 5ft and #1 busheling rose steeply to $459/mt, $465/mt and $473/mt, respectively. Yards from Hong Kong and Singapore remained away as they are sold out. In small bulk, offers for Japanese HMS 1&2 (50:50) rose to $475-480/mt cfr Vietnam but no deals heard at higher prices. 



The Davis Index for HMS 1&2 (80:20) jumped by $11/mt from the prior Thursday to $455/mt cfr Jakarta. Mills showed limited buying interest due to the Ramadan lull and preferred short transit origins for immediate melt requirements. 


Ferrous scrap demand and prices in Indonesia rose buoyed by an increase in Chinese billet imports but restocking slowed ahead of the Labour Day holidays from May 1-5. Other Asean mills booked Central American containerized HMS 1&2 (80:20) at $415-420/mt cfr Thailand and Malaysia. 


The weekly index for P&S 5ft Thursday rose to $470/mt cfr Jakarta rose $12/mt from the prior week amid limited trades. The Davis Index for shredded increased by $11/mt to $465/mt cfr Jakarta on Thursday. Bids lagged by $10/mt from current offers. Buyers are expected to be in the market for post-Eid demand. 


($1=JPY109, TWD27.8, VND23,142, IDR14,450) 

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