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

Japanese ferrous scrap export prices trended flat to down this week since most mills and ferrous scrap exporters stayed away from the market amid national holidays on Sep 21 and 22. A few buyers have already lowered their bids by JPY500-1,000/mt ($5-9/mt) following global cues. 


Domestic ferrous scrap prices were also largely unchanged as Tokyo Steel has kept its purchase prices flat since Sep 15. Japanese currency appreciated to JPY104.5 levels against $1 from JPY105.5 a week ago, resulting in lower export realization. 

Japanese HRC prices were also under pressure due to a fall in iron ore prices and the availability of lower-priced Chinese products.  


Domestic scrap shortage in Japan and recovering steel demand could, however, support prices in the coming days. 

In the export market prices remained largely flat while a few bids dropped by JPY500/mt from a week earlier. 


In the Kanto region, #2 HMS was offered at JPY27,000-27,500/mt fas port with its index settling at JPY27,250/mt fas Japan, down by JPY750/mt from a week ago. In the export market, last heard trade for #2 HMS was at JPY28,000-28,500/mt fob Japan on Monday. The weekly index for Japanese #2 HMS dropped by JPY1,000/mt to JPY28,250/mt fas. On the cfr basis, #2HMS offers were at $305/mt cfr Vietnam. 

Limited deals for #1 busheling (Shindachi) were heard at JPY29,500-30,000/mt fas with its index settling at JPY29,750/mt fas, down JPY750/mt from the prior week. The weekly index for #1 busheling (Shindachi) fell by JPY1075/mt to JPY30,500/mt fob with no deals heard. 


No trades for HS and shredded scrap were reported this week pulling down prices for these scrap grades by JPY1,000/mt. HS and shredded was offered at JPY29,000-29,500/mt fas Japan on Wednesday. 

South Korean mills are struggling with weak domestic demand. Hyundai steel is yet to place bids for Japanese scrap. This mill, however, is likely to open a new tender on Thursday with bids lowered by JPY1,000/mt than earlier levels. The company bought #2 HMS at JPY28,000/mt fob Japan prior week. 


Market participants believe demand for ferrous scrap could improve in the Japanese domestic market with expectations of a revival in finished steel demand. JFE Steel has already refired its idled BF at Fukuyama works, sooner than earlier scheduled in October-end amid such expectations. 


In other Asian markets, limited deals were heard as buyers are waiting for clarity in price direction from Turkey. 

The index for #1 HMS fell by JPY900/mt and JPY1,000/mt to JPY28,500/mt fas and JPY29,500/mt fob Japan, respectively. 


With a drop in Japanese ferrous scrap export prices, most mills in Taiwan and Vietnam are expected to resume bookings. Until recently, Taiwanese mills preferred domestic scrap, prices for which dropped by around $10/mt in the past few days. Yards offered Japanese HMS 1&2 (50:50) at $290-295/mt cfr Taiwan, down by $10/mt from the prior week. Bids, however, were at $285/mt cfr Taiwan on Wednesday. The weekly index for the grade decreased by $6/mt to $292/mt cfr amid a fall in demand. 


The index for Japanese HMS 1&2 (50:50) dropped by $4/mt to $300/mt cfr Vietnam with trades heard at index prices. Bids for the grade were at $290/mt cfr Vietnam. HS and shindachi scrap in small bulk cargoes were offered at $320-325/mt cfr Vietnam, but a deal was heard at $310-315/mt cfr Vietnam levels.  


Vietnamese mills are exercising caution while buying imported ferrous scrap. But traders believe the scenario could change soon as steelmakers are likely to ramp-up production in the coming days. 



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