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

Japan’s ferrous scrap export prices continued their downtrend following on the back of weak demand in the domestic market. Export prices have dropped by JPY2,500-3,000/mt from the last week with a likelihood of a further decline in the coming days. 

Domestic ferrous scrap prices are under pressure amid price cuts announced by Tokyo steel. A glut of ferrous scrap amid subdued  finished steel demand and slow economic activities weighed down prices.   


 In the Kanto region, suppliers lowered offers to encourage trades and the weekly index for #2 HMS settled at JPY21,500/mt fas Tokyo bay on Wednesday, down by JPY3,000/mt. The weekly index for shredded decreased by JPY3,000/mt from the prior week to JPY23,500/mt fas Tokyo bay Japan. HS scrap traded at JPY24,000-24,500/mt fas Tokyo, down from JPY26,500-27,000/mt a week ago. 


After the decline, buyers in Vietnam and South Korea have returned to the market for Japanese scrap. The Davis Index for #2 HMS settled at JPY22,500/mt ($209/mt) fob Japan on Wednesday, down by JPY2,500/mt from the prior week. Trades for #2 HMS concluded with mills in South Korea and Japan concluded at JPY22,500-23,000/mt fob Japan. 

South Korean mills lowered their bids further since they hold enough ferrous scrap inventories to meet their lowered production requirement.

The Davis Index for busheling settled at JPY25,250/mt ($235/mt) fob Japan, down from JPY27,500/mt fob Japan on the prior Wednesday. Early this week, South Korean mill POSCO was heard to have placed a bid for shredded at JPY26,500-27,000/mt cfr South Korea. The mill subsequently, lowered its bid due to the fall in prices.  


Demand for higher-grade Japanese scrap was comparatively low in overseas markets as auto production in many countries remains hit. The price gap between high-grade scrap and low-grade scrap has thus lowered. 

In small bulk cargoes, #2 HMS traded at $250-255/mt cfr Vietnam, down by $15/mt from the prior week. Bids from Vietnamese mills on Wednesday were at $240-245/mt cfr Vietnam. 


The index for HMS 1&2 (50:50) settled at $255/mt cfr Vietnam, down by $13/mt from the prior week. Mills in Vietnam’s southern region booked HMS 1&2 (50:50) at $255-260/mt cfr Vietnam, with bids on Wednesday falling to $250/mt cfr Vietnam. Japanese #1 busheling and HS scrap in small bulk cargoes were offered at $275/mt cfr Vietnam. 

The Davis Index for Japanese HMS 1&2 (50:50) in small bulk cargoes settled at $248/mt cfr Taiwan, down by $12/mt from the prior Wednesday. Trades for the grades concluded at $245-250/mt cfr Taiwan. On Wednesday, suppliers offered HS scrap at $260-265/mt cfr Taiwan, but buyers were not keen at those prices.  



Besides Tokyo steel, other electric arc steelmakers in the country have also lowered their bids for domestic ferrous scrap. 

Tokyo steel has announced four price cuts in 10 days. On Wednesday, bids were decreased by JPY500-1,500/mt ($5-9), effective July 2. Bids were lowered by JPY500/mt for scrap delivered to its at Okayama, Kyusyu, and Takamatsu works. While purchase prices at Utsunomiya dropped by JPY1,500/mt for HS scrap and by JPY1,000/mt all other grades.   

After the latest revision, purchase prices for #2 HMS were at JPY23,000/mt ($214/mt) delivered Utsunomiya plant in Kanto region, JPY24,500/mt delivered Kyushu and JPY24,000/mt delivered Okayama plant. 




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