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

Japanese ferrous scrap export prices which were on an uptrend are likely to lose their steam in the coming days. On Wednesday, prices were flat after rising on Monday. An increased disparity between bids and offers kept trades limited. With trades on a decline, suppliers are likely to lower their offers in the near term. 

Scrap generation rate is yet to improve as manufacturing and demolition activities in the country remained hit. A few ferrous scrap suppliers adopted a wait-and-watch approach before offering more material. 


The Davis Index for #2 HMS settled at JPY26,500/mt ($247/mt) fob Japan on Wednesday, unchanged from the prior week. Trades for #2 HMS concluded at JPY26,500/mt fob Japan this week. South Korean mills are, however, bidding at JPY25,000/mt fob Japan for #2 HMS in bulk cargoes. 


Amid expectations of a fall in prices, many suppliers are mulling withdrawing offers, shared a trader. He believes prices which were on an uptrend for the past two weeks have reached a short term peak. 

The Davis Index for busheling settled at JPY29,000/mt ($270/mt) fob Japan, unchanged from the prior Wednesday. 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 lowered.  


In small bulk cargoes, #2 HMS traded at $275-280/mt cfr Vietnam, down by $5/mt from the prior week. Bids from Vietnamese mills were at $270/mt cfr Vietnam. The index for HMS 1&2 (50:50) settled at $280/mt cfr Vietnam, down by $3/mt from the prior week. Mills in Vietnam’s southern region booked HMS 1&2 (50:50) at $275-280/mt cfr Vietnam, down $5/mt from the prior week. They have increased inquiries for US- origin bulk scrap to stay away from increased Japanese scrap offers. 

The Davis Index for Japanese HMS 1&2 (50:50) in small bulk cargoes settled at $270/mt cfr Taiwan, down by $2/mt from the prior Wednesday. Trades concluded at $265-270/mt cfr Taiwan. On Wednesday, suppliers offered material at $270-275/mt cfr Taiwan, but buyers were not keen at those prices.   


The weekly index for #2 HMS settled at JPY26,250/mt fas Tokyo bay on Wednesday, up by JPY750/mt. The weekly index for shredded rose by JPY750/mt from the prior week to JPY27,750/mt fas Japan. HS scrap traded at JPY28,000/mt fas Tokyo. 



Japan’s domestic ferrous scrap prices continued to move up as Tokyo steel and other electric arc steelmakers increased their bids. 

Tokyo steel announced a seventh purchase price hike on Tuesday, effective June 17. Bids were increased by JPY500/mt for deliveries to Tahara, Kyushu and Takamatsu plants and by JPY1,000/mt for scrap delivered Okayama plant. Purchase prices, however, were kept flat at the steelmaker’s Utsunomiya plant. 


After the revision, purchase prices for #2 HMS were at JPY26,500/mt ($247/mt) delivered Utsunomiya plant in Kanto region, JPY25000/mt delivered Kyushu and JPY24,500/mt delivered Okayama plant. Bids for busheling for deliveries to Tahara and Utsunomiya plants are at JPY28,000/mt and JPY28,500/mt del plant, respectively. 


Prices have increased by a total of JPY5,000-6,000/mt since the beginning of June. Finished steel demand, however, is yet to recover fully post COVID-19. 

Recently, Tokyo steel also raised its finished steel prices by JPY3,000-5,000/mt for its July shipments. 




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