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

US containerized ferrous scrap prices trended up on the West Coast from mostly rangebound levels last week, while on the East Coast, they continued to rise for the second successive week. 


Market participants noted an improved steady stream of inquiries. However, some noted better container availability week-on-week while others witnessed a deterioration in container access, especially on Thursday. 


Better grades continued strong against HMS 1&2 (80:20) with some sellers noting a spread of $25/mt while others felt the spread between the grades was widening in deals.


The sentiment over the market’s strength is diverging and some buyers opined that a Turkey import deal may be announced at lower prices than the prevailing $500/mt cfr on HMS 1&2 (80:20). Others acknowledge a strong US scrap pricing environment, with elevated imported scrap offers, in which they had to purchase and some importers, especially from India, noted a preference for scrap buys in the domestic market. 


Indian buyers are unsure whether finished steel prices may dampen on lower bids and weaker interest in the near term and are hesitant to commit to higher input prices. Although, sustainability and the overall steady sentiment are expected in the market given Chinese domestic activity, strong iron ore prices, and continued economic recovery globally. 


Pakistan buyers were fewer due to market uncertainty but those from Bangladesh were active on tight domestic supplies and improved demand for steel in its domestic market.


Japanese ferrous export markets are reported as strong and unchanged, which supports the US-sourced ferrous deals. 


The weekly Davis Indexes in New York rose on Thursday by $8-11/mt after an increase of $11-23/mt in the prior week. The index for #1 busheling climbed by $7/mt to $513/mt fas while machine turnings rose by $8/mt to $432/mt fas. HMS 1&2 (80:20) and P&S 5ft both rose by $10/mt to $461/mt fas and $489/mt fas, respectively. Shredded gained by $11/mt to $484/mt fas. 


Several East Coast market participants noted the expectation that US domestic prices in the region and overall the US ferrous market is likely to gain by $20-30/gt in July ferrous trading compared to June settled prices. Some participants wondered whether the increase would be feasible given adequate feedstock flows into scrapyards but also noted the strong scrap demand given backlogged production schedules and higher finished steel prices. 


In Los Angeles, the index for #1 busheling rose by $9/mt to $442/mt fas while HMS 1&2 (80:20) increased by $7/mt to $403/mt fas. Shredded climbed by $9/mt to $436/mt fas and P&S 5ft followed in tandem to rise by $10/mt fas to $437/mt fas. 


San Francisco’s indexes shifted upward from the mostly rangebound dynamics last week in the region with #1 busheling and P&S 5ft rising by $9/mt to $434/mt fas and $429/mt fas, respectively. HMS 1&2 (80:20) increased by $11/mt to $399/mt fas as shredded climbed by $5/mt to $430/mt fas.


The Seattle region is contending with very tight container availability and high freight prices. The index for #1 busheling climbed by $5/mt to $430/mt fas as the other grades rose by $9-15/mt. HMS 1&2 (80:20) increased by $15/mt to $395/mt fas in tandem with San Francisco and LA uptrends. P&S 5ft and shredded rose by $12/mt and $9/mt, respectively, to $425/mt fas. 

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