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

Menu

Ferrous this week: Davis Index

Turkey (Apr 24)

  • The daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) declined by $2.50/mt to $252.50/mt cfr on Friday.
  • Trading is on hold in Turkey’s import ferrous scrap market as mills booked significant tonnages of the material for May shipment and stepped back, despite still requiring around five cargoes. Some mills are considering scrap purchases for June shipment, but they want prices to decrease to below $250/mt cfr for HMS 1&2 (80:20) from the USA or the Baltic region, with some expecting them to trend in the range of $240-245/mt cfr.
  • No firm bids or offers were reported in the Turkish scrap market at the end of the week.
  • Turkish rebar sales remain slow, though local spot prices were unchanged at TRY3,300-3,370/mt ex-works, including 18pc VAT, on Friday. However, export rebar prices decreased by $5/mt to $410-415/mt fob on weak demand. A sale of 20,000mt of Turkish rebar to the USA at around $540/mt cfr theoretical weight, duty paid was heard. ($1 = TRY6.99)

 

CIS pig iron

  • The weekly Davis Index for CIS basic pig iron increased by $6/mt to $282/mt fob Black Sea on Friday as sales to China and Italy were reported.
  • Two CIS pig iron exporters succeeded in closing deals because of demand from the two countries. A Russian supplier sold 50,000mt of the material to China at $305/mt cfr for July shipment this week.
  • In another deal, a Ukrainian producer sold 5,000mt of pig iron to Italy at $305-307/mt cfr at the end of last week because of which, the weekly Davis Index for CIS pig iron in Italy rose by $6/mt to $306/mt cfr on Friday.

 

Europe (Apr 21)

  • The weekly Davis Index for HMS 1&2 (75:25) in the ARAG region rose by €12/mt ($13/mt) to €192/mt delivered dockside on Tuesday.
  • European ferrous scrap exporters have continued raising collection prices as they require tonnages to complete their cargoes, which were sold during a buying spree in Turkey in the second and third weeks of April. According to market participants, two to three cargoes were traded from the Netherlands, and prices for HMS 1&2 (80:20) varied in the range of $245-250/mt cfr Turkey.
  • Scrap inflow to European docks improved by 10-20pc recently, but remains subdued, as business recovery has been slow after COVID-19 related suspensions. (€1 = $1.08)

 

Russia (Apr 20)

  • The weekly Davis Index for HMS 1&2 (80:20) or A3 scrap in Russia’s Baltic Sea region increased by $4/mt to $235/mt fob on Monday, while the index in the Black Sea region slid by $1/mt to $230/mt fob.
  • Negotiations were slow in the Russian export scrap market on Monday. Some suppliers expect sales at $255-260/mt cfr Turkey for Russian material, citing its limited availability, while others believe $250/mt cfr to be a more realistic price, because the market has started to soften and prices could decline to those level as demand in Turkey weakens.

 

US: Pig iron imports (Apr 23)

  • The weekly Davis Index for basic pig iron (BPI) dropped to $286/mt cfr New Orleans on Thursday amid low demand and inactive markets as related industries continues to cut operations.
  • BPI producers report tight supply and are offering little tonnage in the market. Material is expected to get tighter until July as Brazilian and CIS producers have sold approximately 800,000mt to China since late February.
  • BPI sales to the US were heard within the past week at $325/mt cfr Nola, however these deals remained unconfirmed on Thursday.
  • A few offers were heard in the market this week at $280-300/mt cfr Nola, but no new deals were confirmed at these prices. The last BPI sale to the US was a mid-March CIS-origin cargo that sold for around $350-355/mt cfr Nola, with offer levels declining thereafter.

 

Mexico: Scrap prices flat

  • Mexico’s domestic ferrous scrap prices were flat for most grades as concerns over low supply increased among recyclers.
  • According to some market participants, some of the biggest mills are buying scrap directly from small storage yards at generous prices, which is increasing the lack of material.
  • In northern Mexico, the weekly Davis Index for HMS 1&2 (80:20) fell by MXN25 at MXN5,775/mt ($230.7/mt) delivered Mexico consumer on Friday.

 

UK

The weekly Davis Index for north UK HMS 1&2 (80:20) ferrous scrap increased by £10/mt ($12/mt) to £120/mt delivered dockside and the index for south UK HMS 1&2 (80:20) rose by £14/mt to £119/mt delivered on Tuesday.

  • Some southern UK collectors had initially cautioned that material would stop flowing across the “weighbridge” unless demands of £150/mt for the material were met in the latest round of weekly negotiations.
  • However, most UK bulk exporters limited increases to £10-14/mt this week, depending on location, and defended relatively wide margins, despite a similar absolute increase in Turkish ferrous scrap import prices over the past three weeks.
  • Market participants believe that the momentum in Turkish HMS 1&2 (80:20) ferrous scrap benchmarks has fizzled out since reaching its recent peak of $257/mt cfr on April 15, with UK bulk ferrous scrap exporters not willing to pay higher prices for dockside deliveries citing slower Turkish demand and a potential correction in prices.

 

Spain

  • The weekly Davis Index for northern Spain’s small bulk HMS 1&2 (80:20) ferrous scrap was flat at €223/mt ($241/mt) cfr and remained unchanged for shredded scrap at €228/mt cfr on Friday.
  • The flurry of activity in the seaborne market, particularly to Turkey, which saw indices climb more than $50/mt during the first half of April has run out of steam causing reluctance among some Spanish mills who noted, they expected offers to come down before concluding negotiations for fresh cargoes. ($1 = €0.93)

 

India ferrous domestic

  • Indian domestic ferrous scrap prices continued to remain flat amid no manufacturing activity. The Davis Indexes for HMS 1&2 (80:20) this remained unchanged Rs20,150 ($/mt) del Mandi Gobindgarh. The indexes for HMS (80:20) at other places too settled flat at Rs21,000/mt del Chennai, Rs22,475/mt del Durgapur, Rs 22,050/mt del Raipur, Rs22,450/mt del Hyderabad, Rs21,000/mt del Goa, Rs22,200/mt del Indore, Rs21,950/mt del Jalna and Rs23,400/mt del Ahmedabad.
  • The daily indexes for sponge iron settled at Rs20,000/mt del Mandi Gobindgarh, Rs18,800/mt del Chennai and Rs17,900/mt del Mumbai mills, also flat as markets remained shut
  • As a relief measure, the Indian shipping ministry has extended a waiver on penal charges, demurrage, detention, dwell time and other charges to be borne by importers after the extension of lockdown. Material Recycling Association of India (MRAI), however, states shipping companies and CFS are reluctant to adhere to these notifications.
  • Shipbreaking yards in Alang Gujarat have resumed work this week after a month of complete shutdown.
  • To kickstart the economy the government eased lockdown regulations in green zones, not severely affected with COVID-19 cases, however, many mills stayed away from restarting production. Even if the lockdown ends on May 3, market participants still expect a gap of at least a week before industries can start production. Maharashtra has revoked starting of industries in green zones and sealed hotspots, tightening its restrictions.
  • Vizag-based RINL has shut down two of its blast furnaces. Markets in Chennai have been closed since last month.
  • Most secondary mills in Raipur plan to restart their plants in the first week of May.

 

Japan 

  • Japanese ferrous scrap export prices increased by JPY1,000-1500/mt from last week on tightened supply. In Kanto region, #2 HMS traded at JPY19,500-20,000/mt fob Tokyo bay, while HS and Busheling traded at JPY23,500-24,000/mt and JPY24,500-25,000/mt fob Japan.
  • Nippon steel corporation decided to temporarily idle its blast furnace in Kimitsu, eastern Japan, to respond to the immediate sharp drop in the demand for steel products in both domestic and exports markets. In line with extension in a deadline for the state of emergency till May 6, Japanese leading construction companies like Shimizu and Kajima have announced suspension of mega projects until May 6.
  • Japanese HMS 1&2 (50:50) in small bulk cargoes was offered at $235-240/mt cfr Vietnam, up by $10-15/mt with bids from Vietnamese steel mills still around $230/mt cfr Vietnam.  Offers for HS and busheling scrap in small bulk cargoes were at $270-280/mt cfr Vietnam, a rise of $15-20/mt from the prior week, but there were no takers at these levels for now.
  • Japanese domestic scrap prices dropped on weakened demand with Tokyo Steel lowered prices by JPY500/mt at three of its works, Tahara, Okayama and Takamatsu steel centre. Bids for #2 HMS remained unchanged delivered Utsunomiya in Kanto region at JPY18,500/mt ($172/mt).

 

South Korea 

  • Imported ferrous scrap prices in South Korea increased supported by global ferrous scrap prices and tightened supply.
  • In bulk markets, US west coast origin HMS1&2 (80:20) in bulk cargoes were offered in the range $245-250/mt cfr South Korea. Mills remained away from buying bulk cargoes as the finished steel demand is still weak and ferrous scrap stock with them remains high.
  • South Korean mills booked #2 HMS at JPY19,500-20,500/mt fob Japan, up by JPY1,000/mt from the prior Wednesday. Japanese HS scrap was offered at JPY23,000-24,000/mt fob Japan to South Korean mill. In the late week, Japanese ferrous scrap export prices rose further with Korean mills traded #2 HMS above JPY21,000/mt fob Japan, said a trader.
  • In containers market, the weekly Davis Index for containerised HMS 1&2 (80:20) settled at $223/mt cfr South Korea, up by $7/mt. Steel mills, however, were not interested in accepting higher offers. Offers from US scrap yards were around $230-235/mt cfr South Korea.
  • South Korean steel resources association has requested major steelmakers including Posco, Hyundai and Dongkuk steel to shift their purchase preference to domestic ferrous scrap than overseas markets. Domestic scrap industry is struggling to sell cargoes and scrap suppliers are selling higher-grade scrap at other markets like Indonesia.

 

Taiwan 

  • Imported ferrous scrap prices in Taiwan have been rising daily this week amid supply crunch and limited offers from US and Europe supplier yards. Taiwanese steel mills announced successive price hikes with domestic ferrous scrap and rebar prices up NT$300-500/mt from a week ago.
  • In container markets, the weekly Davis Index for US-origin HMS 1&2 (80:20) settled at $220/mt cfr Taiwan on Thursday, up by $9/mt. Trades for containerised HMS 1&2 (80:20) concluded at $215-218/mt cfr Taiwan early in the week and then rose to $220/mt cfr Taiwan by Thursday. Offers from US yards were in the range $223-227/mt cfr Taiwan.
  • Taiwan’s domestic ferrous scrap prices rose this week as yards refused to sell ferrous scrap at lower prices on a supply crunch.

 

Vietnam 

  • Trades and enquiries resumed to normal levels with the country witnessing no new cases of virus, social distancing restrictions taken off this week.
  • Hong Kong and Korean origin HMS 1&2 (50:50) offered at $238-245/mt cfr South Vietnam, up by $10/mt with no takers. A steelmaker in the northern region booked Japanese busheling scrap in 20ft containers at $250/mt cfr Vietnam. Offers for HS scrap were in the range $275-280/mt cfr North Vietnam, but deals concluded at $265-270/mt cfr Vietnam.
  • Formosa Ha Tinh steel has scaled down production and cancelled the announcement of June shipments offers. Indian steel mills traded HRC in bulk volumes at $395-405/mt cfr Vietnam for June shipments.

 

Indonesia

  • The standoff between buyers and sellers kept trades limited in Indonesia, while Bangladesh steel mills were paying higher to attract more sellers.
  • South Korean busheling scrap in 20-foot containers traded at $270-275/mt cfr Jakarta, up by $10-15/mt from the prior week. The Davis Index for containerised shredded settled at $250/mt cfr Jakarta, up by $10/mt from the prior week. A few buyers were still bidding at $245/mt cfr Jakarta.

 

Malaysia

  • Malaysian ferrous scrap importers resumed enquiries and trades this week as the lockdown is slated to end soon. Mills bid for US-origin containerised shredded at $245-250/mt cfr Malaysia and South American HMS 1&2 (80:10) in 40ft containers traded at $230-235/mt cfr Malaysia, up by $10/mt from the prior week.

 

China

  • Domestic scrap prices edged up amid short supply and rising finish steel prices this week. Shagang Steel headquartered in Zhangjiagang, east China’s Jiangsu province, increased prices by CNY80/mt on April 20 and CNY50/mt on April 22 to CNY2330/mt for HMS (6-10mm thickness); CNY2370/mt (10-20mm thickness) and CNY2410/mt (thickness not less than 20mm) inclusive of 13pc VAT.

 

Thailand

  • Imported scrap offers for P&S and shredded were at $255-265/mt cfr Thailand but the demand from mills remained subdued.
  • Domestic scrap prices rose due to a fall in generation rate as manufacturing and demolition activities remain halted. The weekly Davis Index for domestic HMS 1&2 (80:20) settled at THB7300/mt ($225/mt) delivered Rayong, inclusive of taxes, up by THB50/mt from the prior week.

 

India

  • Offers for imported ferrous scrap in India rose as a supply crunch in major supplier countries continued to persist. Buyers, however, largely remained completely away from the market.
  • On April 21, the Indian government released a notification extending waiver on detention and demurrage charges till the period of lockdown. Major shipping lines are expected to waive off these charges. Around two months of cargo remains piled up at ports.
  • US-China trade tensions have begun to resurface, and it is believed the steel sector in India and Vietnam could become the biggest beneficiaries on a longer term.
  • At present, only Latin America and Australia suppliers are offering material. Offers from other major supplier countries like the UAE, South Africa and the UK and Europe remained nil due to lockdowns.
  • Brazilian HMS 1&2 (80:20) was offered at $245-250/mt cfr Nhava Sheva. Australia-origin HMS 1&2 (80:20) traded at $255-260/mt cfr Nhava Sheva and Mundra, up by $5/mt from the prior week.

 

Pakistan 

  • Ferrous scrap importers in Pakistan continued to restock as supply is expected to remain short globally. Post Ramadan, steel demand in Pakistan could pick up as builders are gearing to resume construction projects. The government has also announced tax relief for the construction sector, a major driver of the country’s economy.
  • The Pakistan currency appreciated to PKR160.21 on Friday against $1 on Friday from PKR166.21 a week ago.
  • Pakistan’s domestic steel market remains flat with no major change in demand. Rerollers expect ship breaking activities would remain subdued and lockdown could be extended further.

 

Bangladesh 

  • In bulk markets, offers for imported HMS 1&2 (80:20) from USWC suppliers were reported at $285-290/mt cfr Chattogram, up by $15-20/mt from prior deal levels. Buying interest from major steel mills was low and bids were around $260-265/mt cfr Chattogram.
  • Early in the week, containerised traded at $280-285/mt cfr Chattogram, following which offers increased to $290-300/mt cfr Chattogram.
  • Bangladesh domestic market was subdued. Ramadan month began from April 23, a major holiday in Bangladesh marked with subdued business activities.  Major steelmakers in Bangladesh have stopped production activities amid rising COVID-19 cases in the country. Only a few infrastructure projects are operational at present.

($1= JPY107.4; TWD30.09; CNY7.08; THB32.4; MYR4.36; VND23,442.5; KRW1,230.6)

 

Leave a Reply

Your email address will not be published.