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

US containerized ferrous scrap indexes declined on both coasts, as export markets softened. 


The global shift was led by lower activity and imported scrap prices for Turkish bulk buys, but Asian markets reduced their containerized material purchases on lower seasonal capacity utilization, weak steel consumption, mills’ inabilities to realize higher finished steel prices, logistics issues, and, in some regions, liquidity challenges.


The weekly Davis Index in New York for #1 busheling decreased by $3/mt to $252/mt fas and decreased for HMS 1&2 (80:20) by $4/mt to $230/mt fas. The index for machine shop turnings declined by $5/mt to $188/mt fas, while the Davis Index for P&S 5ft dropped by $3/mt to $251/mt fas, and the index for shredded decreased by $2/mt to $245/mt fas. 


Markets in India, Bangladesh, and Pakistan are still struggling with COVID-19. Rising cases in those countries have affected internal logistics. A broker reported the inability of buyers to clear containers because they lack liquidity or their logistics have been disrupted, rending them incapable of moving loads from ports to mills.  


Japanese ferrous scrap export prices continued declining through the week, which put downward pressure on US-origin scrap offers. Asian countries also received lower offers from Russia, Australia, and South America. With sellers expecting Turkey to retreat from the buying market until late July, buyers have been flooded with container offers. 


In Los Angeles, the weekly Davis Indexes declined by $12/mt to $233/mt fas for #1 busheling and by $12/mt to $218/mt fas for HMS 1&2 (80:20). The index for P&S 5ft decreased by $10/mt to $231/mt fas, while shredded also decreased by $10/mt to $231/mt fas. 


On the West Coast, several sellers reported that recent volume buys from Asian markets were anomalies influenced by COVID-19 shutdowns, and that they were waiting for restarts and scrap purchases from abroad. Moreover, domestic scrap inventories were affected in those countries because of social distancing orders. 


Several sellers reported a limited export market, as Taiwanese mills shut down for planned maintenance or to adjust to fewer shifts because of high summer energy costs. Additionally, mills have had trouble achieving higher rebar and flat product prices.


A dynamic containerized export market is expected to return by September. A few buyers have forecasted a soft export market, which will begin to change in late July, while others expect a tepid market into late August. 


The weekly Davis Indexes in San Francisco remained flat at $237/mt fas for #1 busheling, but declined by $2/mt to $221/mt fas for HMS 1&2 (80:20). The index for P&S 5ft decreased by $3/mt to $233/mt fas, and the index for shredded decreased by $3/mt to $233/mt fas.


The Davis Indexes in Seattle decreased across all grades, with #1 busheling falling by $3/mt to $235/mt fas and HMS 1&2 (80:20) declining by $4/mt to $221/mt. The index for P&S 5ft declined by $4/mt to $231/mt fas, while shredded fell by $7/mt to $231/mt fas.


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