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

Japanese ferrous scrap export prices trended down this week as most buyers in Asia lowered bids amid weak finished steel demand. Domestic scrap prices remain unchanged for a third week in a row.


Southeast Asian buyers expect demand for ferrous scrap to improve if Japanese exporters lower their offers. Buyers insisted on lower offers despite an uptick in global scrap prices this week. A drop in offer prices resulted in some export deals to South Korea this week. 

Tokyo Steel has kept its purchase prices flat since last week. Japanese HRC prices were also under pressure due to a fall in iron ore prices and the availability of lower-priced material from China.


In the Kanto region, the Davis Index for #2 HMS Wednesday fell by JPY600/mt to settle at JPY25,900/mt ($246/mt) fas port with deals heard at JPY25,800-26,000/mt. Trades for the grade with Korean buyers were heard at JPY26,500/mt ($251/mt) fob. In the export market, the Davis Index for #2 HMS Wednesday fell by JPY1,400/mt to JPY26,500/mt fob Japan from the prior week.


A HS deals was heard at JPY28,500-29,000/mt fas with the index for the grade settling at JPY28,750/mt fas, down by JPY750/mt.


Limited deals for #1 busheling (Shindachi) were at JPY29,500/mt fob. The Davis Index for the grade settled at JPY29,500/mt fob, down by JPY1,000/mt from the prior week. In the domestic market, the weekly index for #1 busheling (Shindachi) fell by JPY500/mt to JPY28,750/mt fob, with deals heard at JPY28500-2900/mt fas. 


No deals were heard for shredded this week. The Davis Index for shredded settled at JPY28,700/mt fas, down by JPY550/mt on Wednesday. South Korean mills are negotiating for bulk cargoes priced lower than containerized scrap, learnt Davis Index. 


In other Asian markets, limited deals were heard and market participants expect Japanese ferrous scrap prices to rise amid global cues.

The index for #1 HMS fell by JPY700/mt at JPY27,500/mt fas with deals at index level, and down by JPY1,125/mt at JPY28,000/mt fob Japan. Traders indicated that deals closed due to a reduction in offer prices.


Taiwanese and Korean mills are expected to increase bookings in the coming days as they return from annual holidays. Until recently, Taiwanese mills preferred domestic scrap, prices for which trended flat last week. 


Yards offered Japanese HMS 1&2 (50:50) at $280-285/mt cfr Taiwan, down by $5-10 from the prior week. Bids, however, remained flat $275/mt cfr Taiwan on Wednesday from the week prior. The index for the grade remained flat at $279/mt cfr Taiwan. In Vietnam, too the index for Japanese HMS 1&2 (50:50) remained flat at $289/mt cfr, with no trades heard. Bids for the grade were at $280-285/mt cfr Vietnam.


Traders believe the scenario could change as soon as steelmakers ramp-up production in the next few days.


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