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

Mills in South Korea, Taiwan and Vietnam raised bids for imported scrap on Tuesday amid a short supply of domestic scrap and rising offers. With Turkish bids for US-origin HMS 1&2 (80:20), Monday, rising by almost $2.4/mt from Friday to $457.5/mt cfr, traders expect imported scrap offers to Asia to rise further this week. 



Tokyo steel raised domestic scrap bids by JPY500/mt ($4.7/mt) for all works. The new purchase prices for #2 HMS were at JPY41,500/mt delivered Tahara, JPY41,000/mt delivered Okayama, JPY40,500/mt delivered Kyushu, JPY41,500/mt delivered Utsunomiya and JPY39,500/mt delivered Takamatsu, effective March 3. 


With rising global scrap prices and domestic scrap shortage in Japan, traders expect prices to rise further in the coming days. Countries like South Korea, Vietnam and Taiwan are expected to raise bids for Japanese scrap this week while they cautiously track Turkish buying and Chinese demand.


South Korea 

South Korean domestic scrap prices trended up this week. Few mills raised bids for domestic scrap by KRW15,000-20,000/mt on Monday. 


The Davis Index for domestic Heavy A rose by KRW13,750/mt ($12/mt) to KRW423,750/mt ($376.8/mt) and KRW20,000/mt to KRW415,000/mt delivered Incheon and Pohang, respectively. Mills have raised bids for domestic scrap as yards refused to sell at lower prices on firm global ferrous scrap demand, said traders. 


Bids for Heavy A from Hyundai at KRW420,000-425,000/mt delivered Incheon from the prior week. Most mills are expected to refill inventories, while offers are expected to rise on tight domestic supplies.


The weekly Davis Index for domestic Light A rose by KRW20,000/mt to KRW385,000/mt delivered Pohang mill. Due to the limited supply of domestic scrap, many Korean mills are negotiating for Japanese scrap in anticipation of a further rise after Tokyo steel raised bids on Tuesday.



The Davis Index for containerized US-origin HMS 1&2 (80:20), Tuesday, settled unchanged at $429/mt cfr Taiwan from Friday. Monday was a national holiday in Taiwan. Offers rose to $435/mt on Tuesday amid tight supply from exporters, while bids lagged at $425/mt. 


The weekly Davis Indexes for domestic HMS 1&2 (80:20) rose this week by TWD500/mt ($17.9/mt) to TWD11,250/mt ($403.6/mt) and TWD11,500/mt delivered South Taiwan and North Taiwan mills, respectively. Rising international scrap prices and low inventory have prompted most mills to start negotiation for domestic and imported scrap post a long weekend.


On Tuesday, limited offers for HMS 1&2 (70:30) from Central America in FEU heard at $410/mt cfr up from $405/mt cfr in the prior week. Taiwanese importers indicated that domestic scrap is still cheaper than imports but supply remains tight. 



The weekly Davis Index for HMS 1&2 (80:20) rose by VND200,000/mt ($8.7/mt) this week to VND8,950,000/mt ($387.8/mt) delivered South Vietnam inclusive of taxes. With a rise in finished steel demand from the auto and infrastructural sectors, demand for raw material rose this week. 


Most mills were heard negotiating for bulk from the US, Russia and Japan over containerised due to a shortage of empty boxes in supplier destinations. In bulk, offers for Japanese #2 HMS Tuesday rose by $30/mt to $460/mt cfr from the prior week. 


Low domestic scrap availability and anticipation of a further rise in prices prompted enquiries. Vietnamese mills were cautiously watching Turkish buying prices and Chinese bids for Japanese scrap.


A few deals for busheling heard at VND9,700,000/mt delivered South Vietnam on Tuesday.



In China, Shagang Steel raised ferrous scrap purchase prices this week amid strong domestic and international demand, while iron ore prices for 62pc Fe fell on Monday to $174.35/mt cfr Qingdao down by $2.35/mt from Friday due to pollution-related production restrictions. Some traders indicated that post-Lunar New Year, construction activity is limited due to cold weather which could pressure raw material prices. 


The weekly Davis Index for the HMS 1&2 (80:20) settled up by CNY100/mt($15.5/mt) at CNY3,350/mt ($517.7/mt) delivered mill, from the week prior. Steel prices are expected to be under pressure due to rising restriction and harsh weather.


In Tangshan, Q235 150mm square billets rose by CNY10/mt at CNY4,260/mt($658/mt) amid firm global demand for finished steel. Many mills are expected to raise billet prices further due to low inventories and rising raw material costs.


China will speed up recycling and utilisation of renewable resources such as metals scrap to meet its carbon neutrality goal as per a State Council’s release on Monday, which is expected to boost scrap demand.


Japanese HS scrap offers rose to $500-505/mt, Tuesday, up by $30/mt from the prior week. Bids at $470-480/mt cfr.



The weekly Davis Index for domestic HMS 1&2 (80:20) rose by THB1,100/mt($36/mt) to THB12,600/mt ($416/mt) delivered Rayong mill inclusive of taxes, amid limited deals. Mills raised bids after two weeks in anticipation of a further rise in global scrap prices and shortage of domestic and imported scrap. Steel mills are expected to restock scrap inventory this week and are cautiously tracking Turkish and Asian buyers’ purchase prices.


Deals for domestic P&S 5ft heard at THB13,000-13,300/mt on Tuesday, with mills preferring domestic scrap or imported billets amid rising raw material prices. Container shortage and vessel delays added to the woes of steel mills who were more interested in short transit imports. 


Billet trades rose by $15-20/mt to $595-600/mt cfr Southeast Asia, with offers rising to $600-605/mt cfr. Chinese mills concluded Iranian billet trades in bulk volumes at $560-565/mt fob in anticipation of stable demand.



The weekly indexes for HMS 1&2 (80:20) rose by MYR50/mt($12/mt) to MYR1,470/mt ($362/mt), and MYR1,500/mt delivered western mills and eastern mills inclusive of taxes, respectively.


Malaysian steelmakers are cautious amid an extension of lockdown in Malaysia and rising global scrap prices. Trades slowed with offers for US-origin HMS 1&2 (80:20) in FEU at $405-410/mt, up $5-10/mt from the prior week and limited bids at $380/mt. As expected by traders, domestic scrap prices rose this week due to domestic scrap shortage and firm global scrap prices. Steel mills preferred domestic scrap as it remained cheaper than imported. 


($1=JPY105; TWD27.9; CNY6.5; THB30; MYR4; VND23,076; KRW1,124.8)


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