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

Asian buyers lowered imported ferrous scrap bids amid sluggish finished steel demand, cold weather and rising COVID-19 case. Restrictions on movement and fear of lockdown in countries like Taiwan and Vietnam reduced trades, while Indonesian mills remained cautious amid falling prices. 


US and Japanese exporters refused to reduce offer prices in anticipation of a rise in demand from Asian countries after Lunar New Year holidays. With iron ore 62 Fe price rising by $2/mt on Thursday to $152.65/mt cfr China from the prior day offers for Japanese HS rose to $450-460/mt, up by $30-40/mt on Thursday. Traders indicated that Chinese bids rose to $430-440/mt ahead of holidays.


Higher finished steel prices are unviable for real estate and infrastructure projects, leading to slow demand, said steelmakers, adding that with prices falling, steel demand could rise in February.



The Davis Index for containerized US-origin HMS 1&2 (80:20), Thursday, rose by $2/mt to $367/mt cfr Taiwan from the prior day as US-based exporters kept offers firm at $368-370/mt in anticipation of a rise in finished steel demand after holidays. The index fell $3/mt from the prior week (Jan 28) as buyers reduced purchases from the US and focused on negotiating Japanese scrap on low bids.


Taiwanese mills closely tracked Korean purchase as Dongkuk bought 10,000mt of #2HMS at JPY35,000/mt ($332/mt) fob on Wednesday. Japanese exporters refused to negotiate at lower prices and raised offers by JPY1,000-1,500/mt ($9.52-14.28/mt) on Thursday.


Taiwanese buyers said most mills have lowered booking volumes and adopted a wait-and-watch strategy until Chinese Lunar New Year holidays in February. Few deals heard at $360-65/mt cfr this week.


The weekly Davis Indexes for containerized P&S 5ft, #1 HMS, shredded and #1 busheling fell by $10/mt, $6/mt, $10/mt and $4/mt $388/mt cfr, $374/mt cfr, $379/mt cfr and $401/mt cfr, respectively. Amid a fall in Japanese ferrous scrap offers over the week and a drop in Turkish purchase price, mills have turned cautious and shied away from deals. 



Sluggish finished steel demand, fall in billet export prices and holidays kept Vietnamese scrap bids low this week. Due to price volatility and shortage of containers, Vietnamese mills preferred negotiating for bulk scrap from Japan and Russia. Traders indicated that mills are expected to raise purchases post-holidays in anticipation of a rise in finished steel demand.


In the containers market, the weekly index for US-origin HMS 1&2 (80:20) Thursday settled at $373/mt cfr Vietnam down by $7/mt from the prior week. Vietnamese mills’ offers remained flat to $375-380/mt from the prior week. Traders expect bids to rise as exporters were not ready to reduce offers. Mills were cautiously buying amid volatile global ferrous scrap prices.


The weekly index for P&S 5ft and shredded fell by $7/mt and $12/mt, to $403/mt cfr and $391/mt cfr, respectively, on Thursday, amid lower bids.


In bulk, Japanese #2 HMS deal heard at $375/mt cfr on Monday. 



Indonesian mills stayed away from imported scrap market due to price volatility. Many yards have still not registered according to Indonesia’s import policy, thereby limiting offers. Traders are negotiating deals from Hong Kong, Australia, Singapore, and the US but are wary of falling prices.


Buyers expect ferrous scrap prices to drop until Lunar New Year. The weekly Davis Index for HMS 1&2 (80:20) fell $12/mt to $373/mt cfr Jakarta. Bids fell by $10/mt to $370/mt cfr Jakarta on Thursday from the prior week.


The indexes for P&S 5ft and shredded fell by $16/mt and $10/mt at $400/mt cfr and $393/mt cfr Jakarta, respectively. Offers for UK-origin P&S 5ft heard at $420/mt cfr Jakarta, down by $10/mt from the prior week. The weekly Davis Index for #1 busheling fell by $16/mt at $410/mt cfr on low bids. Offers for Malaysian-origin busheling heard at $425/mt cfr on Thursday.




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