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

US West Coast ferrous scrap dock prices in Portland decreased slightly while prices in Los Angeles continued flat and increased in San Francisco. 


The trend seems to follow the EU and UK collection prices that have leveled off or begun to decrease this week as the Turkish imported ferrous scrap market retreats, targeting deals at $290-295/mt cfr Turkey on HMS 172 (80:20), down $5-10/mt from the most recent levels. 


Asian buyers have continued their interest in scrap exports from the US for the first half of September, reinforced by strong, competing Japanese export scrap prices that firmed up during the higher September Kanto trades. Additionally, Japan’s Tokyo Steel announced a second consecutive domestic price increase in September.


However, dock prices could trend flat in the US after adjustments in mid-September as markets show delayed import purchases by mills on concerns of weak domestic steel demand. The chances of dock prices retreating in the US market this month seem remote given the expectation of a strong sideways to $10-20/gt increase in domestic scrap prices in October compared to September settled prices. 


Pakistani and Bangladeshi scrap buyers have retreated or limited their ferrous scrap inventories due to continued rising prices. In fact, the domestic mills in these two countries are concerned not only about steel sales but cash flow in the economy as systems and activities seek to regain traction. This week, rumors are circulating of a deal for bulk shredded by a Bangladeshi mill at $330-332/mt cfr off the US West Coast. If confirmed, the price would be $60-62/mt above late July deals to the region.


Indian mills have also lowered bids for imported scrap finding the present firm pricing from US scrap sellers untenable. Fewer inquiries and deals are being reported in the market. 


South Korean and Taiwanese domestic scrap markets encountered small raises in scrap bids by domestic mills this week. However, mill sources expect domestic scrap prices to soften through September as higher billet and rebar prices are unrealized. Infrastructure and stimulus packages are still in the works and finished steel prices may struggle to maintain upward momentum until those government commitments are evident to consumers. 


The weekly Davis Indexes in Portland decreased for HMS 1&2 (80:20) by $3/gt to $229/gt and by $2/gt to $238/gt for P&S 5ft. Shredder feed, however, increased by $7/gt to $190/gt delivered. Early in the month, regional mills increased buying prices by $20-25/gt, which caused Portland dock prices to jump accordingly. 


In San Francisco, the weekly indexes climbed with HMS 1&2 (80:20) and P&S 5ft increasing by $19/gt to $246/gt delivered and $252/gt delivered, respectively. Shredder feed rose by $5/gt to $165/gt delivered. Market participants report tight scrap feedstocks and decreased feedstock over the past week as fires raged in nearby areas that affected air quality for outdoor scrap processing, collection by peddlers, and even demolition project schedules. 


The weekly Davis Indexes in Los Angeles remained mostly unchanged for the third consecutive week with HMS 1&2 (80:20) up by $1/gt to $187/gt while P&S 5ft and shredder feed trended flat at $203/gt delivered and $146/gt delivered, respectively. 


The containerized market in Los Angeles increased by $15-20/mt as HMS 1&2 (80:20) prices moved from $250-260/mt fas to $270-275/mt this week. Market participants report a tight inventory environment where incoming scrap feedstock is being used to satisfy agreements that were sealed six-weeks ago at lower prices. 


Buyer have been pushing against higher containerized scrap prices, but nonetheless, prices have increased by $35/mt from the $235-240/mt fas in early August, on overall global demand and tight inventories. Turkish bulk import scrap prices, which set the global sentiment for scrap dynamics, have maintained strong at $300/mt cfr Turkey on HMS 1&2 (80:20), up $15-35/mt on the grade from $265-285/mt cfr Turkey in early August.

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