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

Asian weekly domestic ferrous scrap prices fell by $5-10/mt on Tuesday, in line with falling global prices. Mills in Taiwan, Vietnam and South Korea resumed operations after the Lunar holidays but buying activity remained thin as mills hope for further price drops.



The weekly Davis Index for domestic HMS 1&2 (80:20) delivered South Taiwan settled at NT$7,250/mt ($239/mt), down by TWD325/mt. The weekly index for HMS 1&2 (80:20) delivered North Taiwan settled at NT$7,400/mt plant, down NT$375/mt. 


On Feb 1, Feng Hsin Steel lowered ferrous scrap prices by NT$300/mt. Subsequently on Feb 3, the producer reduced sales prices for rebar by NT$300/mt on weak demand. Feng Hsin’s purchase price for domestic HMS 1&2 (80:20) delivered Taichung plant fell to NT$7,200/mt and Grade 40 rebar prices, including local taxes, were at NT$14,500/mt ex-producer plant.  


Domestic demand for finished steel in Taiwan remained weak which affected ferrous scrap prices. Mills await clear cues from China where production has come to a standstill on Coronavirus related lockdowns. Taiwan’s mills hope steel exports from China will fall in February and March, leaving room for other countries to increase output and fill in those voids. 


US-origin containerised HMS 1&2 (80:20) bids fell to $240-245/mt cfr Taiwan this week, down from $245-248/mt cfr on Jan 30. Japanese H1:H2 in small bulk cargoes was offered at $255-260/mt cfr Taiwan, down by $5/mt in the same time period.  



Japanese domestic ferrous scrap prices fell by JPY500-1,000/mt on Tuesday after Tokyo Steel slashed their purchase price for the fourth time in 10 days. With today’s move, the producer has cut prices by a total of JPY2,000-3,000/mt since Jan 25.


New bids for #2 HMS are JPY23,000/mt del Tahara, Kyushu and Utsunomiya plants effective Feb 4. Bids for #2 HMS in Okayama and Takamatsu were at JPY21,500/mt and JPY20,500/mt, respectively. Bids for Busheling dropped by JPY1,000/mt to JPY26,000/mt del Tahara and by JPY500/mt to JPY25,500/mt del Utsunomiya.


South Korea

South Korean domestic ferrous scrap prices dropped in line with a $10-15/mt drop in import prices. 


The weekly Davis Index for domestic Heavy A del Incheon fell by KRW5,000/mt ($4.2/mt) to settle Tuesday at KRW282,500/mt ($238/mt) and fell by KRW7,000/mt to KRW270,500/mt del Pohang. Hyundai Steel and Korean Steel dropped prices by KRW5,000-10,000/mt this week. 


The weekly Davis Index for domestic Light A delivered Pohang plant settled at KRW257,500/mt, down by KRW3500/mt. 



The weekly Davis Index for HMS 1&2 (80:20) delivered South Vietnam settled Tuesday at VND6,000,000/mt ($258/mt), down from VND6,175,000/mt, inclusive of taxes. Demand from mills remained weak as they are yet to resume full-fledged production after returning from Tet holidays.


Vietnam is now firmly a buyers’ market as domestic scrap competes with a flood of offers from US and Japan, to keep material oversupplied relative to demand. Japanese #2 HMS and HS offers to steel mills in the south ranged from $270-275/mt cfr and $290-295/mt cfr, respectively, for material shipped in small bulk cargoes.  



The weekly Davis Index for domestic HMS 1&2 (80:20) China settled at CNY2,575/mt ($365/mt) inclusive of 13pc vat delivered to mill, down by CNY25/mt ($4/mt) as business in the country remains grounded. Many steel makers in the Eastern region have extended their holidays and are scheduled to reopen on Feb 10. 



The weekly Davis Index for domestic HMS 1&2 (80:20) delivered Rayong remained unchanged at THB9,000/mt ($291/mt), from the prior week, inclusive of taxes.  



The weekly Davis Index for domestic HMS 1&2 (80:20) delivered western mill dropped by MYR30/mt ($7.3/mt) to MYR920/mt ($224/mt), while the index for HMS 1&2 (80:20) delivered eastern mill fell by MYR45/mt to MYR1,055/mt, inclusive of taxes.  


Other market updates:



Indonesian steel mills booked very little containerised ferrous scrap this week as market participants returned from Lunar New Year holidays. US-origin P&S 5ft traded at $290/mt cfr Jakarta and Hong Kong-origin shredded traded at $280/mt cfr Jakarta; both down by $10/mt from Jan 30 levels.



US-origin shredded in containers traded at $280-285/mt cfr Port Qasim, down by $5-10/mt from last week, even as Pakistan’s domestic steel prices remained flat. Construction projects including those in the China–Pakistan Economic Corridor are on hold as Chinese nationals working the project are yet to return from their annual holiday in China. Staff has been held back in China amid travel restrictions related to the Coronavirus. 



US and EU-origin shredded in containers traded at $285-287/mt cfr Nhava Sheva, down by $6-8/mt from Jan 30.


($1=NT30.00, CNY6.9, THB30.38, MYR4.073 VND23172.5, KRW1,165.83)


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