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

US containerized ferrous scrap indices increased for the third consecutive week on strong demand from Asian buyers. 


Recovering activities in their domestic markets has prompted Asian buyers to continue buying imported scrap. Although uncertainty around a potential second wave of COVID-19 shutdowns looms, Asian mills are proceeding with recovering schedules as stimulus packages are rolled out and infrastructure projects gain focus.


Domestic prices for hot-rolled coil (HRC) and cold-rolled coil (CRC) in China encountered minor up or down movements, depending on region, but added to the positive sentiment. The less than 1pc variation is giving some support to the market that China’s strong economy will help support November and December finished steel prices throughout Asia. Thus, Asian HRC prices have also inched up.


Ex-warehouse HRC and CRC prices in Turkey declined by 1-2pc two weeks ago but were flat over the past week. CRC and HRC prices in the CIS region encountered a 1-3pc price improvement after trending flat to down by 3pc last week. The strength in these markets is supporting expectations of limited dumping flows and overall dynamic demand throughout influential trade flows into Asia.


Indian and Pakistan buyers remain active and Bangladeshi buyers will return to the market in November for January buys as most mills have sufficient volumes at present. However, buyers from these countries are also contending with higher container freight charges. Some Vietnamese mills recently negotiated bulk scrap deals and could return to containerized markets in November or early December.


US containerized scrap prices are being supported by diminishing inventories and rising prices in buyers’ local markets. As Japanese and Russian export scrap inventories tighten, Asian buyers have increased their interest in US containerized ferrous scrap at higher prices. Expectations on the sustainability of these high prices vary, but the return of Indonesian mills along with smaller mills that have stayed on the sidelines for the past two months could, at minimum, maintain prices but most likely boost another increase over the next few weeks. 


Tight scrap inventories, solid production improvements at US mills, continued orders on HRC and CRC at higher prices, strong rebar sales, firm iron prices, and active export interest is expected to support US containerized prices into November. Most market participants expect a strong market through November and December. 


The weekly Davis Indexes in New York increased across all grades for the second consecutive week with the index for HMS1&2 (80:20) and shredded rising by $5/mt to $268/mt fas and $290/mt fas, respectively. The indexes for #1 busheling and machine turnings climbed by $4/mt fas to $299/mt fas and $244/mt fas, respectively. P&S 5ft increased by $7/mt fas to $288/mt fas. 


In Los Angeles, the Davis Indexes also improved across all grades for the third consecutive week. HMS 1&2 (80:20) and shredded increased by $9/mt to $265/mt fas and 287/mt fas, respectively. #1 busheling rose by $12/mt to $287/mt fas, while P&S 5ft climbed by $7/mt to $285/mt fas. 


The Davis Indexes in San Francisco increased for #1busheling by $11/mt to $280/mt fas with HMS 1&2 (80:20) rising by $12/mt to $260/mt fas, P&S5ft increasing by $10/mt to $280/mt fas, and shredded increasing by $7/mt fas to $278/mt fas. 


In Seattle, the Davis Indexes encountered gains as Asian buyers increased buying activity throughout the US West Coast. The indexes climbed with #1 busheling rising by $10/mt fas to $280/mt fas, HMS 1&2 (80:20) moving up by $14/mt fas to $262/mt fas, P&S 5ft increasing by $8/mt to $278/mt, and shredded rising by $6/mt fas to $270/mt fas.

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