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

Ferrous scrap prices continue to rise in most Asian markets amid tight supplies. Tokyo Steel raised its scrap purchase bids Tuesday by JPY500/mt ($4.7/mt) delivered to all its steelworks. The company had hiked scrap bids by JPY1,000/mt last week on Thursday.



Tokyo Steel announced its fifth scrap purchase price hike in August on Tuesday. Tokyo Steel raised scrap purchase bids by JPY500/mt ($4.7/mt) delivered to all its steelworks, effective Wednesday. 


Purchase prices for #2 HMS will be at JPY26,000/mt ($245/mt) delivered Utsunomiya works, up by JPY500/mt from the prior price revision on Aug 20. Bids for busheling for deliveries to Tahara and Utsunomiya plants are at JPY28,500/mt and JPY28,000/mt del plant, respectively. Purchase prices for #2 HMS and busheling are at JPY26,500/mt and JPY28000/mt delivered Kyushu and JPY25,500/mt and JPY26,500/mt delivered Okayama mill, respectively.


Japanese domestic scrap prices have hit a three-month high amid a shortage of material. In the Kanto region, #2 HMS was offered at JPY26,000-26,500/mt fas port while HS and shindachi prices were at JPY28000-28,500/mt fas, respectively.


South Korea 

Mills raised their bids for domestic ferrous scrap from a week ago. Many buyers sought A3 scrap from Russia due to a shortage of domestic scrap and increase in Japanese export prices after the Kanto tender. 


The Davis Index for domestic Heavy A delivered Incheon and Pohang rose by KRW10,000/mt ($8.42/mt) to settle at KRW312,500/mt and KRW307,500, respectively, with deals at the index price. The weekly Davis Index for domestic Light A rose by KRW10,000/mt to KRW277,500/mt delivered Pohang mill. Limited trades for the grade were reported at the index level.


Offers for Japanese #2 HMS were at JPY26,500/mt fob Tokyo bay, up by JPY1,000/mt from the prior week.



Rebar and billet prices were up this week which made Feng Hsin raise domestic ferrous scrap prices during the week. The Davis Index for domestic HMS 1&2 (80:20) in South and North Taiwan, Tuesday, rose by up by NT$300/mt ($10.20/mt) to settle at NT$7,400/mt ($252/mt) and NT$7,600/mt delivered mill, respectively. 


Feng Hsin Steel bid for domestic HMS 1&2 (80:20) at index price, delivered Taichung plant. The steelmaker’s base offers for rebar and billets rose by NT$300/mt to NT$14,500/mt and NT$13,000/mt ex-works, respectively. Prices were raised amid a rise in input costs.

Many mills cancelled discounts on rebar base offers to pass on partial input cost hikes to end buyers.


In seaborne markets, US-origin containerized HMS 1&2 (80:20) offers were raised to $275/mt cfr Taiwan and the index for containerized US-origin HMS 1&2 (80:20) rose by $5/mt to $268/mt cfr Taiwan from the day prior. Few trades were heard at $270/mt cfr Taiwan. 


Taiwanese mills were bidding at $255-260/mtMarket participants indicated that a majority of Taiwanese mills could raise prices in the next week or two, but for now, prices are not viable for steelmakers as finished steel demand is still sluggish.


Offers for South American HMS 1&2 (80:20) were heard at $255/mt with buyers showing no interest. No bids for Japanese bulk were heard in Taiwan after Kanto tender closed last week. 



The weekly Davis Index for HMS 1&2 (80:20) rose by VND58,333/mt ($15/mt) to VND6,708,333/mt ($287/mt) delivered South Vietnam, inclusive of taxes. Offer prices rose to VND7000000/mt, while few trades were heard at VND6,650,000/mt.


Domestic demand in Vietnam is yet to improve due to the pandemic, while a shortage of domestic scrap and rise in offer prices for imported scrap, has made importers adopt a wait-and-watch approach. Limited bulk deals have concluded since last Tuesday. Increase in Japanese scrap export prices after Kanto bid has turned Vietnamese buyers to the US market for lower-priced bulk cargoes. Bids for Japanese #1 busheling (shindachi) were at $320/mt on Tuesday.


Vietnamese billet suppliers focused on export opportunities as domestic demand for finished steel is yet to recover to pre-pandemic levels. They kept their offers firm for October and November shipments on high imported scrap prices. Offers for steel exports are at $440-445/mt cfr China against bids of $435/mt cfr China.



In China, Shagang Steel bids for domestic #2 HMS (6-10mm thickness) at CNY2,720/mt ($393/mt) del Jiangsu mill, inclusive of 13pc VAT. Offers for the grade, however, were higher by CNY30/mt from these levels. The weekly Davis Index for the grade settled at CNY2,735/mt delivered mill, down by CNY20/mt.

The steelmaker kept its rebar prices unchanged for late August shipments. Prices for billets in the domestic market were at CNY3,410/mt ex-Tangshan mill on Tuesday.



The weekly Davis Index for domestic HMS 1&2 (80:20) inched up by THB200/mt ($6.34/mt) to settle at THB9,600/mt ($305/mt) delivered Rayong mill inclusive of taxes, with trades at the index price. Mills preferred domestic material over imports amid bullish offers from most suppliers. 


In seaborne markets, no trades were heard for US-origin containerized HMS 1&2 (80:20), while offers were at $255-260/mt cfr Thailand.



The weekly indexes for HMS 1&2 (80:20) were flat at MYR1,040/mt ($249.5/mt) delivered western mills and MYR1,095/mt delivered eastern mills inclusive of taxes. Trades were limited but at index price. Market participants are expecting demand for finished steel to pick up in September and October when the government-funded infrastructure projects are expected to gain momentum.


($1= JPY106; NT$29.4; CNY6.9; THB31.5; MYR4.2 ; VND23,308; KRW1,187)


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