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

The growth of US containerized ferrous scrap prices slowed down after climbing for three successive weeks amid a deceleration of container prices. Export prices in the bulk market, however, continued to rise. 


Market participants report increasing inquiries but a difficulty in obtaining container bookings. Scrap inventories along the West Coast have also increased over the past two weeks. 


Bangladesh has returned to the market but a slow down of demand on high grades was encountered over the week as premiums were too high for exporters. Container bookings to Taiwan were adequate but more difficult to Southeast Asia. 


Global scrap price increases and firm offers from US exporters are being supported by strong export prices from Japan, Russia, Australia, Central America, and the UAE. Tokyo Steel increased domestic scrap prices in Japan, which will further support Japanese export scrap prices and competing US scrap offers to Asia. 


Larger mills in Asia recently booked bulk scrap or have inquired about bulk transactions. Deals are expected to trickle in due to strong scrap demand and prices in the domestic market as well as the shortage of containers.


Chinese activity is supporting regional demand in Asia. The probability of unlikely export dumping activity from China that would limit prices and import demand by Chinese buyers is encouraging domestic mills in the region. Strong economic renewal from COVID-19 stimulus packages may also support domestic demand in China and other scrap importing countries such as Taiwan, South Korea, and Vietnam. Moreover, Japan has lowered its inventories after unfulfilled Chinese scrap orders. Chinese mills could increase scrap imports but the lack of clarity in some domestic government policies is keeping them at bay with only few container buys reported.


The weekly Davis Indexes for containerized scrap in New York increased only $2-6/mt after leaping by $21-29/mt in the previous week. The indexes for HMS 1&2 (80:20) and shredded increased by $3/mt to $401/mt fas and $422/mt fas, respectively. The index for #1 busheling climbed by $6/mt to $447/mt fas while P&S 5ft rose by $2/mt to $424/mt fas. The index for machine turnings increased by $6/mt to $363/mt fas after an increase of $29/mt the previous week. 


In Los Angeles, the weekly Davis Indexes rose by $4-18/mt. The index for #1 busheling jumped by $18/mt to $439/mt fas on strong competing domestic demand. Market participants report limited to no sales to the export market but are shipping most inventories to US based mills via rail. The indexes for HMS 1&2 (80:20), P&S 5ft and shredded all increased by $4/mt to $392/mt fas, $415/mt fas for both the latter two grades, respectively.


Dealers that were seeking transactions at $400-405/mt fas range on HMS (1&2) 80:20 for the range reported a push back by buyers and the inability to finalize on booking containers satisfactorily with other buyers, especially, those to Southeast Asia. 


The San Francisco weekly indexes increased by $2-22/mt during the week. The index for #1 busheling rose by $22/mt to $435/mt fas but other grades only rose by $2-5/mt. The index for HMS 1&2 (80:20) climbed by $5/mt to $385/mt, P&S 5ft rose by $3/mt to $408/mt fas and shredded climbed by $2/mt to $405/mt fas. 


The Davis Indexes in Seattle gained $3-20/mt. The index for #1 busheling continued climbing and increased by $20/mt to $430/mt fas. The index for HMS 1&2 (80:20) rose by $3/mt to $388/mt fas. P&S 5ft and shredded both climbed by $10/mt to $410/mt fas, and $408/mt fas, respectively.

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