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 buyer countries in Asia slowed purchases amid weak finished steel demand and expectations of a further decline in prices. Domestic scrap prices have remained unchanged for the second week. Despite subdued demand in the Japanese market, a low scrap generation and collection rates cushioned prices from falling.


Market participants believe demand for ferrous scrap could improve in the Japanese domestic market if exporters reduce prices in-keeping with the global market.


Tokyo Steel has kept its purchase prices flat since the prior 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. Indication of China’s plans to restart imports of ferrous scrap kept Japanese exporters positive. Before China’s restriction on imports of ferrous scrap, Japan was one of the major suppliers to the country. In 2017, exports to China stood at 1.81mn mt, which then fell to 40,000mt in 2019. Should the export to China rise, mills in Japan could have to pay more for procuring domestic ferrous scrap.  


In the Kanto region, the index for #2 HMS was at JPY26,500/mt fas port, down by JPY250/mt, with deals heard at the index price. Trades for the grade with Vietnamese buyers were at JPY27,800-28,000/mt fob, equivalent to $295/mt cfr Haiphong.

In the export market, the index for  #2 HMS rose by JPY525/mt to JPY27900/mt fob Japan.


An HS export deal was heard at JPY30,500/mt fob and $320/mt cfr Vietnam this week, with the index for the grade in the domestic market settling at JPY29500/mt fas, down by JPY167/mt.


Limited deals for #1 busheling (Shindachi) were at JPY29000-29,500/mt fas and the index for the grade settled at JPY29,250/mt fas, down by JPY125/mt from the prior week. In the export market, the weekly index for #1 busheling (Shindachi) fell by JPY100/mt to JPY30,525/mt fob.


A deal for 4000mt Japanese shredded was heard this week at JPY32,000/mt cfr South Korea or JPY30,500/mt fob. The index for shredded settled flat at JPY29,250/mt fas on Wednesday.
South Korean mills were said to be negotiating for bulk cargoes at lower prices and stayed away from any containerized trades. 

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

The index for #1 HMS was flat at JPY28,200/mt fas and down by JPY125/mt at JPY29,125/mt fob Japan. Deals in the domestic market were heard at fas index price.


Taiwanese and Korean mills are expected to resume bookings in the coming days, soon as their respective holidays end. Until recently, Taiwanese mills preferred domestic scrap, prices for which dropped by around $10/mt last week and subsequently trended flat this week.  


Yards offered Japanese HMS 1&2 (50:50) at $290-294/mt cfr Taiwan, unchanged from the prior week.  Bids, however, were at $275/mt cfr Taiwan on Wednesday, down by $10/mt from the week prior. The index for the grade decreased by $7/mt from the week prior and by $19/mt from Sept 16 to $279/mt cfr Taiwan.


The index for Japanese HMS 1&2 (50:50) dropped by $5/mt to $289/mt cfr Vietnam with no trades heard. Bids for the grade were at $285/mt cfr Vietnam.

Vietnamese mills booked limited volumes of 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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