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

Imported ferrous scrap prices in East Asian markets continued to trend up despite slow demand. International bulk scrap prices surged amid tightening supply and returning demand. Steel trade resumed in China after the Labour Day holidays pushing prices up further. Higher freight charges and recovering demand spiked the landed price of ferrous scrap in Asia.


In China, domestic billet prices on Thursday jumped by CNY130/mt to CNY5,120/mt ex-works Tangshan on May 6, pushing HRC export offers higher by $50/mt against pre-holiday closing. On the other side, Turkish domestic rebar prices strengthen nearing $700/mt creating room for ferrous scrap to rise further on improving demand post-Eid holidays. 



Japanese ferrous scrap exporters raised their offers on fas basis as demand in the seaborne market remained lower than the domestic market. Post-Golden Week Holidays, Japanese exporters are waiting for Kanto tender to offer clarity on prices.


Japanese mini mill, Tokyo steel continues to hold ferrous scrap purchase prices unchanged from April 21. South Korean mills have also remained away banking on surplus domestic availability and on-hand inventory. Following global cues, prices are soon expected to rise. 



The daily Davis Index for US-origin containerized HMS 1&2 (80:20), Thursday, settled at $434/mt cfr Taiwan up $5/mt from Wednesday. From a week earlier, the index rose $1/mt. Offers for the HMS 1&2 (80:20) were in the range of $435-440/mt cfr Taiwan with very limited volumes as supply from yards tightened. 


Taking cues from the Turkish market, mills in Taiwan are anticipating active demand in the bulk market as Ramadan nears completion. In South Asia, mills have drawdown scrap inventories and expected to restart booking as economies recover with the implementation of massive vaccination drives against COVID-19.


Offers for Japanese HMS 1&2 (50:50) climbed up by $5/mt to $470-475/mt cfr Taiwan, trades concluded at $465/mt cfr Taiwan early this week. 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 inched up by $1/mt to $444/mt and $451/mt cfr Taiwan, respectively, from April 29. Mills opted for US-origin material amid a sharp rise in Japanese offers. Freight charges remained stable this week, however, are expected to rise further amid the non-availability of containers, globally.


The indexes for P&S 5ft and #1 busheling rose $3/mt and $1/mt to $461/mt and $469/mt cfr Taiwan amid increasing demand for higher grade scrap this week, traders said. 



The weekly index for containerised US-origin HMS 1&2 (80:20), Thursday, rose to $445/mt cfr Vietnam up $4/mt from the prior week. Vietnamese importers were comparatively slow in trades after strong restocking ahead of Labour days holidays.


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 $480-485/mt cfr Vietnam. Amid tight supply, a mill is heard to have bought Japanese busheling at $535/mt cfr Vietnam.


On a weekly basis, the Davis indexes for containerized #1 HMS, Thursday, rose by $5mt to $453/mt cfr Vietnam. Shredded, P&S 5ft and #1 busheling rose to $462/mt, $472/mt and $480/mt, up $3/mt, $7/mt and $7/mt respectively. In small bulk, offers for Japanese HMS 1&2 (50:50) rose to $485/mt cfr Vietnam, while #2 HMS in small bulk traded at $480/mt cfr Vietnam. 



The Davis Index for HMS 1&2 (80:20) jumped in containers by $14/mt from the prior Thursday to $469/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 appetite. Most mills are expected to resume ferrous scrap restocking. The cancellation of export rebate and waiving off of import duties on billet and 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 P&S 5ft Thursday rose to $489/mt cfr Jakarta rose $19/mt from the prior week amid tight supply. The Davis Index for shredded increased by $19/mt to $484/mt cfr Jakarta on Thursday. Bids lagged by $10-15/mt from current offers. Buyers are expected to be in the market for post-Eid demand. 


Other ASEAN mills booked Central American containerized HMS 1&2 (80:20) at $425-430/mt cfr Thailand and Malaysia. 


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

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