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

The US containerized ferrous scrap prices trended down for the fourth consecutive week on both coasts. However, on the East Coast – prices began to inch up in the middle of the week, even though they registered a week-over-week decline at the index level. 


For example, some buyers made unmatched bids on shredded at $340-350/mt fas during the week and then on Thursday increased them to $370/mt fas for some sellers, while others have closed deals at $375-380/mt fas though some deals were also heard at $360/mt fas. A shredded bid at $365-370/mt fas is not attractive to sellers when they can place the same product at $365-370/gt FOB yard for domestic buyers. With February trading starting on Thursday, any potential buyers had to compete with the stronger domestic market. 


Japanese ferrous export offers seem to have bottomed out. Sellers believe most US markets will reach a trough next week before facing renewed interest from Asian buyers towards the end of the month. Some US West Coast sellers have opted to keep offers high despite limited sales potential, in anticipation of a demand surge at the end of the month. 


The weekly Davis Indexes in New York fell this week with most grades decreasing by $11-20/mt fas against a range of $10-18/mt fas last week, except machine turnings, which can have larger fluctuations. 

The index for #1 busheling declined by $15/mt to $396/mt fas while HMS 1&2 (80:20) slipped by $20/mt to $359/mt fas. P&S 5ft and shredded both decreased by $11/mt to $384/mt fas and $382/mt fas, respectively. Machine shop turnings declined by $23/mt this week to $322/mt fas. The machine turnings grade is encountering a narrower spread against HMS 1&2 (80:20) than the more common trend of a $50-100/gt spread. 


In Los Angeles, the weekly Davis Indexes decreased by $23-31/mt last week and added another drop of $23-33/mt this week. The index for #1 busheling decreased by $33/mt to $354/mt, HMS 1&2 (80:20) fell by $23/mt to $321/mt fas, P&S 5ft dropped by $27/mt to $339/mt fas and shredded slipped by $25/mt to $342/mt fas.


Some containers became available for several large buyers who proceeded to book containerized loads after a few months of extremely tight availability. Freight costs are noted anywhere between $30-50/mt now. LA-based deals for HMS 1&2 (80:20) were noted between $310-325/mt predominantly on Thursday, with the most common contract and grade expectations at $315-320/mt fas. 


In San Francisco, the indexes declined by $35/mt to $350/mt fas for #1 busheling and by $28/mt to $310/mt fas for HMS 1&2 (80:20). Both P&S 5ft and shredded decreased by $25/mt to $333/mt fas. 


The Davis Indexes in Seattle also dropped with #1 busheling falling by $22/mt to $353/mt, HMS 1&2 (80:20) dropping by $21/mt to $318/mt fas, P&S 5ft decreasing by $17/mt to $335/mt fas and shredded declining by $18/mt to $338/mt fas.


The daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) fell to $397.50/mt on Thursday against $415.89/mt cfr a week ago, down $18.39/mt. With active inquiries and strong domestic scrap markets in the US, for example, Turkey import scrap deals are not expected to close at much lower prices. If anything, any upward push may be evident towards the end of February.

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