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

US containerized ferrous scrap indices decreased in New York but rose on the West Coast. On the East Coast, cautious buyers who had accepted firm offers last week, retreated at higher prices, or established firm bids this week. On the West Coast, scrap deals softened prices on Thursday compared to levels achieved earlier in the week. 


The weekly Davis Indexes in New York softened across most grades, with #1 busheling declining by $2/mt fas to $289/mt fas and HMS1&2 (80:20) slipping by $3/mt fas to $266/mt fas. The index for P&S 5ft decreased by $5/mt to $289/mt fas and shredded fell by $2/mt fas to $285/mt fas. The index for machine shop turnings was the only one that rose by $8/mt to $248/mt fas.


Shredded scrap containers continue to be quoted at $290-295/mt fas but buyers’ bids are placing pressure for deals at $280-285/mt fas.   


The Los Angeles Davis Indexes for containerized scrap surged with #1 busheling, HMS 1&2 (80:20), and shredded increasing by $7/mt to $292/mt, $269/mt fas, and $289/mt fas, respectively. The index for P&S 5ft rose by $9/mt to $289/mt fas. Deals were heard at $270-274/mt fas on HMS 1&2 (80:20) early in the week but by Thursday, cracks began to surface in deals depending on destination. Some market participants report transactions at $265-268/mt fas while others are sustaining the $270-272/mt fas price noting that their deals have not softened from two days ago, but some buyers are less aggressive. 


Sellers noted that Taiwanese buyers are pushing the market prices down while simultaneously seeking more volumes. Overall scrap inventory continues to remain tight on the West Coast. Taiwanese, Indian, and South Korean buyers remain concerned about rising scrap prices that may not be realized on finished steel sales in their domestic markets. Hence, they are beginning to place downward pressure on prices. A Taiwanese buyer continued seeking scrap this week to hedge against shipments from the US and South and Central America that were planned but may not materialize in the necessary timeline to meet production schedules. 


Pakistani and Bangladeshi buyers delayed ferrous scrap purchases due to weak domestic steel demand, which is influencing finished steel sales at discounted prices. Moreover, domestic scrap prices have softened in countries like Bangladesh and South Korea and are beginning to decline in some areas of India such as Mumbai. 


Softening prices in China’s domestic market and slowing imports by the country are also influencing lower billet prices in Asia along with other finished steel products that have been on recent demand. 


Emerging markets such as Vietnam, Thailand, and Malaysia have a continued strong demand for imported scrap, but buyers are exercising caution due to rising scrap prices. 


The higher September Kanto auction ferrous scrap prices along with increasing domestic scrap prices continue supporting higher Japanese scrap export prices, an alternative source to US-sourced scrap. Asian buyers continue exploring Russian, CIS, Central American, and other ferrous sources given the higher US and Japanese scrap prices.


The Davis Indexes in San Francisco increased across all grades for the second consecutive week with #1 busheling rising by $5/mt to $285/mt fas and HMS 1&2 (80:20) increasing by $8/mt to $264/mt fas. P&S 5ft and shredded increased by $6/mt to $284/mt fas for both grades. Like Los Angeles, prices in San Francisco were higher earlier in the week but started softening towards the end of the week. 


The weekly Davis Indexes in Seattle also increased across all grades, with #1 busheling up by $4/mt fas to $283/mt fas while HMS 1&2 (80:20), P&S 5ft, and shredded indexes rose by $7/mt to $263/mt fas, $283/mt fas, and $283/mt fas, respectively.


Price resistance in the containers market is following the trend set by Turkish mills who lowered bids to $290-295/mt cfr Turkey for HMS 1&2 (80:20) bulk compared to the latest deals of $300/mt cfr on the grade. Turkey is facing a devalued lira against the dollar along with soft domestic and export demand on rebar. 


The rise in domestic finished steel prices in the US along with other destinations as Turkish export offers on rebar soften, for example, may give Turkish dealers an opportunity to place more material in the export markets. Until recently, Turkish offers were considered too high by US importers against US domestic mill prices. 

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