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

US containerized ferrous scrap indices were rangebound on both coasts on Thursday after declining for three weeks on the East Coast and two weeks on the West Coast. 


The sideways pricing expected in the US domestic scrap market in October limited further declines in containerized exports this week. Scrap sellers on both coasts highlighted limited inventories for export despite the softer Turkish export scrap demand. 


The weekly Davis Indexes in New York moved within a limited range with #1 busheling flat at $285/mt fas and P&S 5ft holding at $274/mt fas. The index for HMS1&2 (80:20) increased by $1/mt to $256/mt fas while shredded and machine turnings both declined by $1/mt to $275/mt fas and $235/mt fas, respectively.


Sellers continue to expect a rebound in the export market and are therefore limiting discounts on deals. Buyers, especially from India, continued purchasing limited containerized quantities. 


The Los Angeles Davis Indexes for containerized scrap encountered a small drop across all grades with #1 busheling, HMS 1&2 (80:20), and P&S 5 ft declining by $1/mt to $275/mt fas, $248/mt fas, and $272/mt fas, respectively. The index for shredded declined by $3/mt to $273/mt fas.  


Deals in Los Angeles began to soften in the week of Sep 18, continued declining as October began, but gained some ground at the beginning of this week. Transactions fell to $240-250/mt fas last week but began rebounding to $245-250/mt fas over the last few days. Several sellers reported additional inquiries from Asian buyers for November deliveries and extremely tight inventories for any immediate commitment. The net effect is expected to support containerized prices over the next two weeks.


Several dealers also reported an issue with the negotiation of #1 busheling. Asian buyers, especially from Taiwan, are not considering West Coast grade definitions in exact equivalency as those from the East coast. Interest in #1busheling declined this week but the effect on pricing and further definition of the grade by sellers on ongoing deals is yet unknown. 


Asian buyers continue to remain concerned about finished steel sales in their domestic markets, but Pakistan and India are expecting a gradual recovery in Q4 2020. 


A national holiday in Taiwan is expected to keep buys delayed until next week. Additionally, more clarity and support for US-sourced containerized scrap is expected as China returns from a holiday. Chinese activity in finished steel and ferrous imports could also support Japanese-sourced scrap which in turn can support US-scrap demand and price levels. 


The Davis Indexes in San Francisco were either unchanged or encountered a slight uptick. HMS 1&2 (80:20) and shredded increased by $1/mt to $235/mt fas and $265/mt fas, respectively. The indexes for #1 busheling and P&S 5ft carried over week-on-week at $267/mt fas and $260/mt fas, respectively. 


In Seattle, the container indexes were flat or increased. #1 busheling and shredded remained unchanged $270/mt fas for both grades. HMS 1&2 (80:20) and P&S 5ft increased by $2/mt to $245/mt fas and $269/mt, respectively.

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