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

Amid sluggish finished steel demand in most Asian markets importers reduced bids for Japanese ferrous scrap by JPY5,000/mt ($48/mt) this week. Domestic ferrous scrap prices also declined from a week ago as Tokyo Steel reduced prices for the sixth time in January. 

Effective Jan 27, Tokyo steel reduced #2 HMS purchase prices by JPY4,000/mt ($38.5/mt) to JPY32,000/mt del plant Utsunomiya. The mill also reduced its bids for #2 HMS by JPY1,500/mt to JPY39,500/mt del Tahara, JPY1,000/mt to JPY39,500/mt del Okayama, JPY1,000/mt to JPY39,000/mt del plant Kyushu and JPY1,500/mt to JPY38,500/mt del Takamatsu.


Traders focused on exports to reduce scrap inventories as Japan is facing a power shortage and many mills have been forced to cut production. Bids by Taiwanese importers trended sideways after Korean steelmaker Dongkuk purchased #2 HMS at JPY36,500/mt fob equivalent to $365/mt cfr South Korea on Tuesday. These bids were down JPY5,000/mt from prior purchases.


Offers prices for Chinese buyers were down by $50-60/mt from prior deals at $450-460/mt cfr Shanghai on Wednesday, while bids were at $440-450/mt. Most exporters were cautious while offering material to China as they faced delays in the documentation process and stringent quality checks when earlier shipments had made it to Chinese ports. Offers for Japanese HS scrap reduced by $50/mt from the last deal heard at $500/mt cfr Shanghai. 

The decline in Japanese scrap prices could be short-lived with a recovery in February amid a global shortage of scrap and increased finished steel demand after the Chinese Lunar New Year holidays. 


The weekly Davis Index for Japanese #2 HMS fell by JPY5,050/mt to JPY34,700/mt($334.5/mt) fas. In the export market, the weekly index for the grade fell by JPY5,083/mt to JPY36,500/mt fob Japan.


Bids for Japanese #1 busheling (Shindachi) fell by JPY5,125/mt to JPY40,000/mt fob from JPY45,000/mt a week ago. The weekly index for the grade fell by JPY5,025/mt at JPY38,475/mt fas and JPY5,025/mt at JPY40,100/mt fob Japan. On Tuesday, the purchase price for US-origin HMS 1&2 (80:20) in Turkey fell by $25/mt from Monday, hurting market sentiment. 

The weekly Davis Index for HS and shredded, Wednesday, fell by JPY5,033/mt and JPY5,000/mt to JPY37,800/mt fas and JPY37,625/mt fas, respectively. Bids for HS and shredded were at JPY37,400-37,800/mt fas.

Offers for HMS 1&2 (50:50) fell by $25-30/mt to $410-415/mt cfr Vietnam this week, and the index for the grade fell by $27/mt to $408/mt cfr Haiphong. 


In Taiwan, the index for Japanese HMS 1&2 (50:50) fell by $28/mt to $401/mt cfr on bids declining to $395-400/mt cfr on Wednesday.


Buyers from Vietnam, South Korea, and Taiwan have either paused trades or negotiated with Japanese exporters for lower prices amid a bearish sentiment in Asian ferrous scrap markets.



A bulk deal was confirmed for shredded scrap of US-origin at $430/mt cfr China on Tuesday. Importers are negotiating for ferrous scrap from other exporting countries with containerized scrap deals heard from South America. Most exporters are unsure of the quality standards at Chinese ports and chose to keep an eye out for previous shipment clearances before confirming any deal. 

The index for P&S 5ft (small bulk) of Japanese-origin settled at $451/mt cfr China port.



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