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

US containerized ferrous scrap indices rose for the fourth consecutive week on strong demand from Asia. 


Active export inquiries, tight scrap inventories in the US, strong domestic demand, higher domestic and imported steel prices on flats, solid rebar sales, and firm iron ore prices, have most market participants expecting a robust containerized trading environment in November. 


Japanese export scrap prices rose again this week with support from increasing prices in the domestic scrap market after Tokyo Steel increased prices at several plants by $10/mt. Japanese scrap has remained active with a recent deal announced Thursday with a South Korean mill. Vietnam is also said to be bidding for Japanese scrap. 


Imported scrap prices in the Asian markets continue to ascend, though some buyers are growing cautious after almost a month of sustained increases. Finished steel prices rose in Taiwan, US, Turkey, India, CIS, and China, thereby, giving support to continued strong scrap prices globally. 


Asian countries continued production and sales plans despite the risk of a second COVID-19 related shutdown. Stimulus packages as well as the belief of better lockdown processes, as seen in the recent shutdowns in the UK and Europe, is sustaining the demand for imported scrap. Some market participants wonder about the length of the bull market, but a consensus is building that scrap prices and export demand will continue at present levels through November. 


Pakistan’s appreciating currency could help importers over the next week despite some hesitation on sluggish domestic activity for finished steel. Increases in India’s sponge prices and domestic raw materials along with more aggressive production schedules in December and January are supporting Indian scrap import buys at higher prices. 


The weekly Davis Indexes in New York climbed across all grades, except machine turnings, for the third consecutive week. The indexes rose for #1 busheling by $4/mt to $303/m fas, for HMS1&2 (80:20) by $5/mt to $273/mt fas, for P&S 5ft by $2/mt to $290/mt fas, and for shredded by $7/mt to $297/mt fas. Machine shop turnings remained unchanged week-on-week at $244/mt fas. 


In Los Angeles, the Davis Indexes increased for the fourth consecutive week as Asian buyers continued engaging containers despite higher prices. Alternatives to US-sourced scrap such as Japan, EU, and Russia also met with higher dock prices, increasing domestic scrap prices, tight scrap inventories, and firm export offers. The index for #1 busheling rose by $1/mt to $288/mt fas and P&S 5ft climbed by $4/mt to $289/mt fas. HMS 1&2 (80:20) and shredded increased in tandem by $2/mt to $267/mt fas and 289/mt fas, respectively. 


The Davis Indexes in San Francisco increased for #1busheling by $4/mt to $284/mt fas, HMS 1&2 (80:20) rose by $2/mt to $262/mt fas, P&S5ft increased by $3/mt to $283/mt fas, and shredded climbed by $5/mt fas to $278/mt fas. 


In Seattle, the Davis Indexes encountered gains aligned with the Los Angeles market as Asian buyers continue seeking loads, especially obsolete grades. The indexes climbed with #1 busheling and HMS 1&2 (80:20) increasing by $8/mt to $288/mt fas and $270/mt fas, respectively. P&S 5ft increasing by $7/mt to $285/mt fas while shredded rose more robustly by $12/mt to $288/mt fas.

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