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

Most ferrous scrap importers are realigning their bids to market sentiments post Kanto tender opening this morning. At Kanto, average bids for #2 HMS were at JPY42,976/mt, up JPY3,705/mt ($34/mt) from the prior tender in February. Current bids were 5,200 mt at JPY43,060/mt fas, 5,200mt at JPY43,060/mt fas and 5,000mt at JPY42,800/mt fas.


Although Kanto tenders were up from the prior month, bids fell short of market expectations. Tokyo steel lowered domestic scrap bids, Wednesday, by JPY500/mt ($4.6/mt) for Utsunomiya plant. Buyers are expecting a drop of JPY500-1,000/mt in bids from South Korea and other importing countries this week. Revised #2 HMS price delivered Utsunomiya plant was at JPY42,000/mt.


Offers for HS fell by $5-10/mt to $500-510/mt cfr China with bids at $490/mt cfr on Wednesday. Spot iron ore price for 62pc Fe fell on Tuesday by $10.5/mt from Monday to $163.6/mt cfr Qingdao on Monday amid pollution-related production restrictions.


Chinese mills halted booking as they awaited Kanto results. The index for P&S 5ft (small bulk) China port settled at $498/mt cfr, up by $4/mt from the prior week but down by $5/mt from the prior day on bearish sentiments.


Exporters raised offers for #2 HMS to JPY43,500/mt fob, up by JPY500/mt from the week prior with the index rising by JPY500/mt to JPY43,000/mt fob. Bids from South Korean mills are expected to fall to JPY42,500/mt fob this week post revision of domestic scrap bids by Tokyo steel. On fas basis, the index rose by JPY958/mt to JPY42,458/mt($390.6/mt) fas with deals heard on Kanto bid prices. Traders indicated importers are not keen on purchasing at current prices and expect offers to fall in the coming days on global cues.


Bids for Japanese #1 busheling (Shindachi) were unchanged at JPY47,000/mt fob but are expected to fall by JPY500-1,000/mt due to limited demand from importing countries and domestic steel mills. The weekly index for the grade rose by JPY62/mt to JPY47,375/mt fob Japan, while on a fas basis the index rose by JPY1,250/mt to JPY46,750/mt fas.


With Turkish mills reducing scrap purchase prices, the index for HMS 1&2 (80:20) fell by $5.8/mt to $456.4/mt cfr on Tuesday from the day prior. Traders expect a fall in global ferrous scrap prices next week due to improved supplies.


The weekly Davis Index for HS and shredded, Wednesday, rose by JPY1,000/mt to JPY46,750/mt fas, respectively. Limited trades heard as most mills adopted a wait and watch strategy ahead of Kanto tender. South Korean, Taiwanese and Vietnamese mills were closely watching Chinese purchases before negotiations.


Offers for HMS 1&2 (50:50) fell by $5/mt to $460/mt cfr Vietnam this week. After Tokyo steel lowered bids, the index for the grade fell by $4/mt to $456/mt cfr Haiphong.


In Taiwan, the index for Japanese HMS 1&2 (50:50) fell by $10/mt to $445/mt cfr. Offers fell by $10/mt to $450/mt cfr. Export bids were held back to analyze Kanto results. Low domestic scrap demand and shutting down of a blast furnace by Nippon steel added to the bearish market sentiment.



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