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

East Asia’s ferrous scrap prices lost $10/mt on Monday as finished steel demand remains weak against high inventories. For domestic scrap purchases, China’s Shagang Steel lowered prices by CNY110/mt ($16/mt) and Taiwan’s Feng Hsin Steel by TWD600/mt ($21/mt) from the prior week. 



Shagang Steel has announced two price cuts last week. The company lowered domestic ferrous scrap procurement prices by CNY50/mt ($7.3/mt) in each price cut with the most recent coming into effect on Sep 25. A decline in steel futures ahead of the Golden Week holidays led to a downtrend in the market and pressured the steelmaker to cut prices. 

Effective Sep 25, bids for domestic HMS 1&2 (80:20) were revised to CNY2,640/mt ($387/mt) delivered Jiangsu plant, down by CNY50/mt from the last set of prices announced just the day prior. In September, prices declined four times by a total CNY160/mt after hitting a 13-month high at CNY2,800/mt delivered Zhangjiagang mill inclusive of 13pc value-added tax early September. The steelmaker has, however, kept its domestic finished steel prices unchanged for September-end deliveries. 

The weekly Davis Index for HMS 1&2 (80:20) on the prior Tuesday settled at CNY2,730/mt del plant, down by CNY110/mt. Domestic steel demand in China has tapered down, weighing down ferrous scrap prices. 

Chinese rebar prices also dropped by CNY130/mt to CNY3,630/mt ex-works from early September. Mills lowered HRC export offers for Vietnamese and Taiwanese buyers amid weakened domestic market. 



Prolonged weakness in finished steel demand drove many steelmakers to lower their bids for both, imported and domestic scrap purchases. Some mills even stayed away from bidding due to this downtrend. The market is also expected to remain slow in the country during the moon festival from October 1-4 and national holidays from October 9-11.


A leading steelmaker, Feng Hsin on Monday, thus cut its domestic scrap purchase prices by TWD300/mt ($10/mt) and decreased rebar sale prices by TWD400/mt ex-works to boost trades. After the revision, base prices for HMS 1&2 (80:20) were at NT$7200/mt ($247/mt) delivered plant, down by TWD600/mt from a week ago. The company has cut its billets and rebars offer prices by TWD400/mt to NTD13,100/mt ex-work and NTD14,600/mt, respectively. 


The weekly index for domestic HMS 1&2 (80:20) in South and North Taiwan fell by TWD700/mt from the prior week.

The daily index for US-origin containerized HMS 1&2 (80:20) dropped by $2/mt to $275/mt cfr Taiwan on the prior Friday. Mills bid at $270-273/mt cfr Taiwan in line with a drop in domestic scrap prices, down by $10-15/mt from mid-September. Suppliers, however, expect prices to rise next week following strengthening sentiment in Turkey.

Japanese export offers have reduced by JPY1,000/mt or $10/mt over the last week amid low demand in Taiwan and other East Asian markets. Japanese HMS 1&2 (50:50) offers to Taiwan, therefore, fell to $285-$290/mt cfr on Monday. Still, buyers are waiting for a further decline.


Sellers, however, are hoping for the fall to be short lived. Mainly because Taiwanese finished steel demand is expected to recover with rising construction activities as the monsoon season is drawing to a close.   


($1= CNY6.82; TWD29.14)


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