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

US containerized scrap prices continued the upsurge that began in October with a significant increase this week. The indexes for various core grades surged by $34-51/mt on the East Coast and by $54-70/mt on the West Coast on rising demand. 


The market may receive support into January with forecasts of $50-80/gt increases against December settled prices. Variances will depend on the region, grade, and where prices settled given higher offers from mills that have moved into January pricing at the end of the early December trading period.


India, which is facing a stronger billet export market, raised domestic scrap prices, and higher sponge iron prices, could continue purchasing imported scrap despite the rising prices in that market. Pakistan mills are assessing the domestic market at present and have reduced import buys, though they could resume in January. Bangladeshi buyers have slowed down buys due to higher prices but remain active because of their imported scrap needs. 


Global scrap prices may continue receiving strong support with higher domestic scrap prices and tight global scrap inventories in Turkey, Taiwan, South Korea, Vietnam, and Japan. In fact, Japanese exporters are expected to continue with firm pricing, supporting US scrap export prices to Asia. Turkey’s latest $450/mt cfr deal on HMS 1&2 (80:20), up by $92/mt against a Dec 1 deal, is further supporting global sentiment. Limited scrap offers are being heard out of the US, which considering strong demand, will also support scrap prices into January at the minimum. 


The weekly Davis Indexes in New York climbed by $34/mt to $420/mt fas for #1 busheling and by $51/mt to $391/mt fas for HMS 1&2 (80:20). P&S 5ft rose by $39/mt to $412/mt fas and shredded scrap climbed by $37/mt to $411/mt fas. Machine shop turnings lagged in the past week but caught up after leaping by $82/mt to $353/mt fas this week as several Indian buyers sought the grade. 


The Davis Indexes in Los Angeles jumped for #1 busheling by $58/mt to $400/mt fas as HMS 1&2 (80:20) rose by $64/mt to $373/mt fas. The index for shredded increased by $57/mt to $398/mt and remained close to P&S 5ft pricing, which surged by $69/mt to $397/mt fas. 


The container market has boomed since October with HMS 1&2 (80:20) in Los Angeles climbing by $19/mt from $248/mt fas in early October to $267/mt fas in early November. By Dec 3, this index increased by $32/mt to $299/mt fas and has leaped by $74/mt fas over the past two weeks, surpassing the $51/mt aggregate increase in the previous two months.


Concerns over container availability and freight prices continue. Some market participants noted that the challenges in the containers market are greater for some buyers than those related to higher prices in the scrap import market. Freight tags could double in January and in some instances freight quotes for 40ft containers have risen by 165pc for January compared to December prices. 


Scrap inventories remain tight throughout the West Coast because of lower feedstock and some sellers withdrawing from the active market with plans to return to higher prices in early January. Some scrap dealers are also focusing on accumulating some inventory for early January trading. Dock prices surged in Los Angeles this week to attract scrap inventories. Due to the continued increase in container prices this week, the spread between container and dock is still wide making containers more attractive to sellers.


In San Francisco, the index for #1busheling leaped by $70/mt to $400/mt fas and HMS 1&2 (80:20) rose by $64/mt fas to $368/mt fas. The index for both P&S 5ft and shredded increased by $68/mt to $398/mt fas, respectively. Buyers in search of better grades have been substituting P&S 5ft and shredded depending on inventories and kept both their prices level for some months now. 


The Davis Indexes in Seattle for #1 busheling jumped by $68/mt to $398/mt fas and HMS 1&2 (80:20) rose by $65/mt to $373/mt fas. P&S 5ft and shredded both increased by $66/mt to $395/mt fas, respectively.

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