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

Sluggish finished steel demand in Asian markets has pressured importers to reduce bids for Japanese ferrous scrap by JPY1,000-2,000/mt ($9.6-19/mt) this week. Domestic ferrous scrap prices also declined from a week ago. Amid slow demand, Tokyo Steel kept domestic scrap bids unchanged this week. Traders focused on exports to reduce inventory, while importers from Taiwan moved sideways after Korean steelmaker Hyundai lowered bids on Wednesday.


Chinese mills booked two small bulk deals of Japanese HS 3,000mt and 2,500-3,000mt at $500-505/mt cfr China. Traders indicated active negotiations, which could lead to more exports to China in January.


The decline in Japanese scrap prices could be short-lived, opined market participants, as they expect prices to rise in February amid a global shortage of scrap and increased finished steel after Chinese Lunar New Year holidays. 


The weekly Davis Index for Japanese #2 HMS fell by JPY2,000/mt ($19/mt) to JPY39,750/mt($382.9/mt) fas. In the export market, the weekly index for the grade fell by JPY1,992/mt to JPY41,583/mt fob Japan with Hyundai reducing bids by JPY2,000/mt ($19/mt) to JPY39,500/mt fob from the prior week. A South Korean mill bought 50,000mt of Japanese #2 HMS  at JPY42,000/mt fob on Friday.


Bids for Japanese #1 busheling (Shindachi) fell by JPY1,000-1,500/mt to JPY44,500/mt fob from JPY46,000/mt a week ago. The weekly index for the grade fell by JPY1,500/mt at JPY43,500/mt fas and by JPY1,375/mt at JPY45,125/mt fob Japan. On Tuesday, the purchase price for US-origin HMS 1&2 (80:20) in Turkey fell by $17/mt from Friday hurting sentimentJapanese exporters.


The weekly Davis Index for HS and shredded, Wednesday, fell by JPY1,667/mt and JPY1,875/mt to JPY42,833/mt fas and JPY42,625/mt fas, respectively. Hyundai’s bids for HS and shredded heard at JPY44,000/mt fob. Deals for HS and busheling heard at JPY49,000/mt cfr Korea and JPY49,500/mt cfr Korea, respectively, on Friday.


In Kanto, the Davis Index for #1 HMS fell JPY1,500/mt to JPY41,625/mt fas from the prior week and by JPY1,625/mt to JPY42,750/mt fob Japan.


Offers for HMS 1&2 (50:50) fell $15-20/mt to $430-440/mt cfr Taiwan this week, and the index for the grade fell by $33/mt to $429/mt cfr Taiwan. Hyundai bid at JPY40,000/mt fob.


In Vietnam, the index for Japanese HMS 1&2 (50:50) fell by $28/mt to $435/mt cfr on bids declining to $425-430/mt cfr on Wednesday.


Buyers from Vietnam, Korea and Taiwan have either paused trades or continue to negotiate with Japanese exporters amid a bearish sentiment in Asian ferrous scrap markets.



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