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

US East Coast dock collection prices for ferrous scrap declined by $37-58/gt across all grades and dock locations amid reduced export activity for a fourth straight week, as well as global struggles to contain COVID-19.


India announced a 21-day shutdown, while Turkey has ceased purchasing US scrap for the past two weeks, creating a weak export outlook. US sellers told Davis Index they received few, if any, quotes for containerized material today. Domestic demand for scrap in Turkey has diminished and rendered the market inactive. Mills intend to cut production because of weak steel product sales.


In Boston, the weekly Davis Index for export yard HMS 1&2 (80:20) dropped by $58/gt from $197/gt to $139/gt delivered dock, and P&S 5ft declined by $58/gt from $207/gt to $149/gt delivered Boston dock. The index for shredder feed decreased by $43/gt from $146/gt to $103/gt delivered. 


The weekly Davis Index for export yard buying prices in New York for HMS 1&2 (80:20) declined by $56/gt from $194/gt to $138/gt delivered on Tuesday, and decreased by $56/gt from $204/gt to $148/gt delivered New York dock for P&S 5ft. The index for shredder feed dropped by $42/gt from $144/gt to $102/gt delivered. 


In Philadelphia, the index for export yard collection prices of HMS 1&2 (80:20) dropped by $52/gt from $193/gt to $141/gt delivered. The Davis Index for P&S 5ft decreased by $52/gt from $203/gt to $151/gt delivered Philadelphia dock, and dropped by $37/gt from $143/gt to $106/gt delivered for shredder feed.  


The prices for HMS 1&2 (80:20) has decreased by about $80/gt since March 10, depending on dock location and prior sale price. East coast dock collection prices are expected to keep dropping, with no market bottom in sight. 


On March 17, sellers projected a $20-30/gt decline this week for East Coast dock collection prices, and expected to see HMS 1&2 (80:20) at $175-185/gt. By the end of last week, that grade dropped to $160-170/gt, which was before this week’s additional decline of $30/gt.


Market participants face significant and rapid price decreases, and they’re unsure how low the market will fall. Industrial activity in most sectors, including auto, energy and construction, is weak.


In addition to export challenges, cutting steel operations for downstream end-users has hurt domestic steel production and contributed to weaker supply, demand, and domestic scrap needs. The industry is taking a wait-and-see approach, and has expressed little confidence in a quick turnaround.

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