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 cases. 

Higher finished steel prices are unviable for real estate and infrastructure projects, leading to slow demand, said steelmakers, adding that with the prices falling, steel demand might rise in February. Most Asian mills are expecting a further drop in global scrap import prices in sync with a drop in Japanese domestic scrap prices and Turkish buying at lower levels.



The Davis Index for containerized US-origin HMS 1&2 (80:20), Thursday, fell by $12/mt to $370/mt cfr Taiwan from the prior day as US-based exporters reduced offers to $370-375/mt to offload inventory and avoid a cash crunch. The index fell $50/mt from the prior week (Jan 21) as buyers reduced purchase from the US and focused on Japanese scrap amid falling prices there. 


Taiwanese mills closely tracked Korean bids which fell by JPY5,000-6,000/mt ($48-57.6/mt) from prior deals. On Thursday, Hyundai Steel bids for #2 HMS at JPY35,000/mt ($335.5/mt) fob Japan, down by JPY1,500/mt from Dongkuk’s purchase at JPY36,500/mt fob on Tuesday.


Taiwanese buyers said most mills have lowered booking volumes and adopted a wait-and-watch strategy until Chinese Lunar New Year holidays in February. They expect global ferrous scrap prices to fall amid cold weather and limited finished steel demand in most Asian countries. Few deals heard at $380-385/mt cfr this week. South American offers for HMS 1&2 (80:20) heard at $355-360/mt on Thursday.


The weekly Davis Indexes for containerized P&S 5ft, #1 HMS, shredded and #1 busheling fell by $52/mt, $46/mt, $51/mt and $15/mt $398/mt cfr, $380/mt cfr, $389/mt cfr and $405/mt cfr, respectively. Amid a fall in ferrous scrap offers from Japan and a drop in Turkish purchase prices, most mills have turned cautious. Mills are negotiating more deals for Japanese scrap after Hyundai Steel lowered bids on Thursday.


Some Japanese HMS 1&2 (50:50) offers fell to $370/mt, $50-60/mt lower than last week, but no deals concluded due to a lack of firm bids in a falling market. Importers expect a rise in Chinese buying in February post Chinese New Year holidays. They expect scrap prices to remain low till February amid limited buying. Buyers are staying away from long transit containerised shipments and instead preferring small bulks from Japan or other Asian-origin scrap.


With Turkish buyers lowering prices by $69.25/mt from Jan 4, Asian traders are expecting ferrous scrap prices to fall further globally. The Turkish Index for US-origin HMS 1&2 (80:20), Wednesday, fell by $3/mt from the prior day.



Sluggish finished steel demand both in the domestic and exports markets led to mills lowering bids further this week. Demand for steel imports from China and other Asian countries have declined amid harsh weather conditions and a resurgence of the pandemic. 


In the containers market, the weekly index for US-origin HMS 1&2 (80:20) Thursday settled at $380/mt cfr Vietnam down by $45/mt from the prior week. Vietnamese mills reduced bids to $375-380/mt, while offers fell to $380-385/mt. Traders expect offers to fall as mills are cautiously buying amid a fall in global ferrous scrap prices. Finished steel prices have soared making input costs unviable for infrastructure and real estate sector in most Asian countries.


The weekly index for P&S 5ft and shredded fell by $35/mt and $37/mt, to $410/mt cfr and $403/mt cfr, respectively, on Thursday, amid lower bids. Few deals for P&S 5 ft in containers heard at $410/mt cfr on Wednesday.


In bulk, Japanese #2 HMS offers fell by $50-60/mt from the prior week to $380 mt cfr but no deals heard. 



Indonesian mills increased enquiries for imported scrap but 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. 


Buyers expect ferrous scrap prices to drop until Lunar New Year. The weekly Davis Index for HMS 1&2 (80:20) fell $31/mt to $385/mt cfr Jakarta. Bids fell by $30-35/mt to $380-385/mt cfr Jakarta on Thursday.


The indexes for P&S 5ft and shredded fell by $23/mt and $30/mt at $416/mt cfr and $403/mt cfr Jakarta, respectively. Offers for Singapore-origin P&S 5ft heard at $420-30/mt cfr Jakarta, down by $30-40/mt from the prior week. The weekly Davis Index for #1 busheling fell by $24/mt at $426/mt cfr on low bids. 



Tokyo Steel cut ferrous scrap price for the seventh time in January. Effective Jan 29, Tokyo steel reduced ferrous scrap purchase prices by JPY3,000/mt ($28.7/mt) delivered Utsunomiya plant, while prices for other plants remain unchanged. Current bids for #2 HMS are JPY39,500/mt ($378.7/mt) del Tahara, JPY39,500/mt del Okayama, JPY39,000/mt del Kyushu, JPY38,500/mt del Takamatsu, and JPY29,000/mt del Utsunomiya. 


Japanese EAF makers are facing power shortages, which has curtailed their operating capacity. Tokyo Steel’s Utsunomiya facility is under maintenance this week, lowering ferrous scrap demand in the regions.



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