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

Imported ferrous scrap offers in East Asian markets are steadily increasing despite slow demand. However, offers for Southeast Asian billets dropped to $670-690/mt cfr China as steel market sentiment soured after the Chinese premier warned steelmakers on unreasonably high prices. 


Initial reactions to China’s warning on steel prices turned scrap buyers bearish, but sellers are bullish on global cues including active buying by Turkish mills. 


Steel prices in China remained pressurized through the week as authorities try to rein in iron ore and steel prices which hit record highs and have the potential to slow the country’s economic growth. Chinese domestic billet offers dropped to CNY5,150/mt ($814/mt) ex-Tangshan, down CNY150/mt from a day prior.  



Tokyo Steel raised ferrous scrap purchase bids by $9-14/mt, effective May 19. The latest bids for #2 HMS are at JYP51,500/mt delivered Tahara works, JYP50,000/mt delivered Okayama, JPY50,000 delivered Kyushu, JPY48,000/mt delivered Utsunomiya, and JPY48,500/mt delivered Takamatsu. 



Authorities, Wednesday, imposed a Level 3 alert on the entire island amid a rise in the number of COVID-19 cases in major cities and counties.


The weekly Davis Index for containerized #1 HMS rose by $12/mt to $483/mt cfr Taiwan port whereas the index for shredded was up by $12/mt to $492/mt cfr Taiwan port. 


Demand continued to be under pressure in Taiwan, which could lead to a drop in prices. But if global scrap prices rally, buyers could have to shed their resistance and raise bids in the coming days, traders said. The indexes for P&S 5ft rose by $12/mt to $502/mt cfr Taiwan while #1 bushelling rose by $10/mt to $508/mt cfr Taiwan port. 



Vietnamese mills limited their purchases this week after Vietnam Steel Association (VSA) urged local steelmakers to opt for domestic raw materials over high-priced imports to reduce costs amid rising global steel prices.  


The weekly Davis index for containerized #1 HMS, Thursday, rose by $12/mt to $493/mt cfr Vietnam. Shredded, P&S 5ft and #1 bushelling rose to $502/mt, $512mt, and $517/mt; up by $14/mt, $14/mt, and $12/mt, respectively. Offers for US-origin HMS 1&2 (80:20) rose to $485/mt cfr Vietnam, up by $12/mt from last Thursday. 



The weekly index for P&S 5ft rose to $525/mt cfr Indonesia port up by $7/mt amid weak supply. The Davis Index for shredded increased by $7/mt to $520/mt cfr Indonesia port. 


Offers for P&S 5ft were in the range of $520-$530/mt. 


Indonesian mills have lost their competitive advantage in the billet export market after China waived off import duties on steel products from non-ASEAN countries. Steelmakers are likely to stay away from imports and focus on the lower-priced domestic scrap to maintain margins in the coming days.


($1= JPY108.98, TWD27.97, VND23039.72, IDR14,413.56)

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