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

Shortage of domestic scrap in Japan and the rise in Kanto and Kansai tender bids prompted exporters to raise offers, while limited trades were heard this week due to holidays. Also an anticipated rise in scrap demand post-holidays in South Korea, Taiwan and Vietnam supported offer prices. Most mills were away this week ahead of annual maintenance.


Japan’s monthly Kansai export tender which concluded on Monday had the winning bid for 5,000mt #2 HMS at JPY39,005/mt ($368/mt) fas Tokyo bay up JPY8,335/mt ($79/mt) compared to the previous tender.


Traders raised offers for HS by $10/mt to $470-480/mt cfr China this week on higher bids at Kansai tender and expectation of brisk demand post-Lunar New Year holidays. Bids heard at $450-455/mt cfr. Spot iron ore price for 62fe rose by $3/mt to $166/mt cfr Qindao on Monday. Chinese mills are expected to increase purchase volumes post-holidays, said traders. HRC manufacturers in China were cautious of a possible cut in rebates to 8-9pc from 13pc to curb steel output, which is expected to further pressure raw material prices in China.


The index for P&S 5ft (small bulk) China port settled at $459/mt cfr, up by $9/mt from the prior week on raised offers. The weekly Davis Index for Japanese #2 HMS rose by JPY2,750/mt to JPY38,500/mt ($363/mt) fas, while the index for the grade on fob basis rose by JPY2,750/mt to JPY41,250/mt fob Japan due to rising offers. Many traders indicated that offers are rising every day while bids were limited due to holidays.


Exporters raised offers for #2 HMS to JPY41,000-42,000/mt fob, up by JPY1,000-2,000/mt from the week prior. Offers for Japanese #1 busheling (Shindachi) rose by JPY5,000/mt to JPY47,000/mt fob from a week ago. The weekly index for the grade rose by JPY3.250/mt to JPY42,375/mt fas Japan. Most Asian mills limited buying this week as offers rose more than their expectations and preferred to wait till the end of holidays. With Turkish mills raising scrap purchase volumes as well as prices and the index rising by almost $4/mt to $413.75/mt on Tuesday from Feb 12, many traders are expecting a rise in global ferrous scrap prices next week.


The weekly Davis Index for HS and shredded, Wednesday, rose by JPY3,250/mt to JPY43,250/mt fas, respectively. Limited trades were heard this week as most mills waited for cues from the Chinese market.


Offers for HMS 1&2 (50:50) rose by $25-30/mt to $420-430/mt cfr Vietnam this week. After Kansai bids, the index for the grade rose by $25/mt to $414/mt cfr Haiphong. Buyers resisted offers and were cautious of rising prices.


In Taiwan, the index for Japanese HMS 1&2 (50:50) rose by $20/mt to $401/mt cfr. Offers rose to $405-415/mt cfr on Wednesday, up by $25-35/mt from the prior week.


Buyers from Vietnam, Korea and Taiwan have either paused trades or are in negotiations with Japanese exporters. Most buyers are expected to stay away from the market until next week when China reopens. Market participants expect prices to rise amid a global shortage of scrap and increased finished steel demand post-holidays.



Leave a Reply

Your email address will not be published.