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

US West Coast ferrous scrap dock prices were flat in Los Angeles and Portland while adjusting down by $4-7/gt in San Francisco this week. 


The lack of Turkish deep-sea scrap buying activity is injecting uncertainty in the global bulk scrap market. A recent rumored US-sourced scrap deal to Turkey at $293/mt cfr on HMS 1&2 (80:20) from Puerto Rico indicated a decrease of $7/mt from the $300/mt cfr level that the grade held throughout September. The deal has been denied by some market participants and East Coast-based bulk sellers are maintaining firm offers near $300/mt cfr. 


Asian scrap buyers reduced their recent high trade interest seeking lower-priced domestic scrap as a temporary alternative in an uncertain environment. Asian scrap buyers are concerned over weak domestic steel sales, regional excess inventories of finished goods that could lead to aggressive price cuts, and profitability spread pressures on higher imported scrap prices.


Bulk scrap traders in the EU, Latin America, and the US, however, are maintaining strong offer prices on limited scrap inventories and the belief that the present pause will be short-lived once Asian buyers align economic stimulus activities, and domestic scrap policies in countries such as Indonesia are finalized.


Japanese export scrap sellers conceded small discounts in recent export trades but could stay flat through the week as the market awaits clarity. Japan, a competing source for US-scrap, is expected to have mills ramp up production in October, which may support domestic prices that have remained unchanged for the most part in late September.


The weekly Davis Indexes in Portland were flat across all grades with HMS 1&2 (80:20) at $230/gt delivered and P&S 5ft at $239/gt delivered dockside. Shredder feed was also unchanged at $191/gt delivered. 


Domestic mills in the region increased scrap purchases by $20-25/gt during the September scrap buying week, compared to August prices. Last week, regional market participants expected mills in the Pacific Northwest to trade sideways to slightly up in October, but given the latest developments, mills could offer buying prices at $5-10/gt lower against September settled prices. The decline in mill price expectations is attributed to slower container export buys competing for inventories. 


In San Francisco, the weekly indexes decreased after remaining flat last week with HMS 1&2 (80:20) slipping by $7/gt to $239/gt delivered and P&S 5ft declining by $4/gt to $248/gt delivered. Shredder feed also fell by $7/gt to $191/gt delivered. The slight downward adjustments reflect the concerns about softening export prices in October, but sellers noted that docks have active orders to fill for immediate shipment. 


The weekly Davis Indexes in Los Angeles were rangebound for the fifth consecutive week with HMS 1&2 (80:20) at $187/gt delivered dockside, P&S 5ft at $203/gt delivered, and shredder feed at $146/gt delivered. Dock prices in Los Angeles are expected to decline by $10/gt in early October on weaker export demand and corresponding prices. 


The containerized market in Los Angeles decreased for the second consecutive week with HMS 1&2 (80:20) trades decreasing by $15-20/mt to $245-250/mt fas compared with the predominant level of $265/mt fas last week.

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