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

Japanese ferrous scrap export prices , which have been on an uptrend for over a month fizzled out this week. Early in the week, prices dropped by over JPY1,000-1,500/mt ($9-14/mt). Price came under pressure as supply tightness eased. A decline in global ferrous prices also weighed down Japanese export offers. 


The Davis Index for #2 HMS Wednesday settled at JPY25,000/mt ($235/mt) fob Japan down JPY1,500/mt from the prior week. Trades for #2 HMS concluded at JPY25,000-25,500/mt fob Japan this week. South Korean mills are, however, bidding at JPY24,000-24,500/mt fob Japan for #2 HMS in bulk cargoes.  


In a recent bulk deal, Dongkuk Steel in South Korea booked #2 HMS at JPY26,500/mt cfr South Korea or equivalent to JPY24,500-25/mt fob Japan. 


The weekly Davis Index for busheling settled at JPY27,500/mt ($258/mt) fob Japan, down JPY1,500/mt from the prior Wednesday. Demand for higher-grade Japanese scrap was comparatively low in the overseas markets as auto production in many countries is yet to ramp up to pre-pandemic levels. The price gap between high-grade scrap and low-grade scrap has lowered.  


In small bulk cargoes, #2 HMS traded at $265-270/mt cfr Vietnam, down by $10/mt from the prior week. Bids from Vietnamese mills were at $260/mt cfr Vietnam. The index for HMS 1&2 (50:50) settled at $268/mt cfr Vietnam, down by $12/mt from the prior week.  


A Bangladeshi steelmaker has booked two bulk ferrous scrap cargoes from Japan to refill falling ferrous scrap inventories on increased consumption and ramped up production despite a spike of COVID-19 cases in the country. In the bulk market, 7,000mt of shredded and 3,000mt of P&S were booked at an average of $300/mt cfr Chattogram and in another parcel, 8,000mt busheling and 2,000mt of HS scrap was booked above $300/mt cfr Chattogram.


The weekly Davis Index for Japanese HMS 1&2 (50:50) in small bulk cargoes settled at $260/mt cfr Taiwan, down by $10/mt from the prior Wednesday. Trades concluded at $260/mt cfr Taiwan, with bids dropping to $250-255/mt cfr Taiwan levels. On Wednesday, suppliers offered material at $260-265/mt cfr Taiwan, but buyers were not keen at those prices.    


The weekly index for #2 HMS Wednesday settled at JPY24,500/mt fas Tokyo Bay, down by JPY1,750/mt from the prior week. The weekly index for shredded lowered by JPY1,250/mt to JPY26,500/mt fas Japan from the prior week. HS scrap traded at JPY26,500-27,000/mt fas Tokyo.  



Japan’s domestic ferrous scrap prices were flat for almost seven days amid a decline in consumption. Major EAF-based steelmakers including Tokyo Steel have started lowering their bids on Wednesday. Tokyo Steel announced its first price cut after eight successive hikes. The steelmaker reduced bids for all grades of domestic scrap by JPY500/mt for deliveries to Utsunomiya plant in the Kanto region, effective June 25. However, prices remained flat for deliveries to Tokyo Steel’s other four works in Japan to gauge actual price and demand direction.  


After the revision, purchase price for #2 HMS was at JPY26,000/mt delivered Utsunomiya plant in Kanto region. The purchase bids for #2 HMS was flat at JPY25,000/mt delivered Kyushu and Tahara and at around JPY24,500/mt delivered Okayama plant. Bids for busheling scrap were flat at JPY28,000/mt for deliveries to Tahara and Utsunomiya plants.   

The steelmaker has announced a price cut for ferrous scrap purchases after almost two months. The prior price drop was recorded on April 27, since then prices were either on an uptrend or unchanged.  




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