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

Dock prices in Los Angeles drove the US West Coast ferrous scrap dock prices after a substantial increase last week as the regional docks seek to attract materials. Portland and San Francisco docks remained mostly rangebound week-on-week. 


Taking cues from the increase in the Turkish scrap import market, which has risen by $113.21/mt to $470/mt cfr since Nov 30 for US-origin HMS 1&2 (80:20), global scrap prices have surged with countries seeking a share of the limited scrap inventories. As a result, dock prices in the UK, US, Russia, Baltics, and other traditional sources have also increased significantly. 


US bulk sellers are limiting offers to Turkey at the moment as buyers including Mexico and other countries in South America have paid higher prices. 


Japanese export scrap offers, a competing scrap source to the US, are rising amid uncertain bids as seller expectations continue to ascend. Japanese domestic producers such as Tokyo Steel have increased domestic scrap prices nine times since the beginning of January to obtain inventories. The consumption of higher-priced raw materials has led to increases in finished steel prices in Japan. 


Some scrap sellers in the US and elsewhere are also withholding moving on deals on limited scrap inventories expecting even better prices in January. 


Domestic ferrous scrap tags increased in Malaysia, South Korea, Taiwan, Vietnam, Thailand, and China, further supporting the higher import prices. China could begin importing scrap in early January. The added demand will further support global scrap prices. Lowering iron ore prices, however, could help temper the global scrap price increase. 


Buyers in Taiwan, India, Pakistan, and elsewhere, though, are making limited import scrap purchases due to concern over the spiraling prices. Several buyers from India noted that resistance to higher prices may stop the immediate surge amid concerns of end consumers refusing to absorb the higher raw material costs. Thus, some buyers are moving to a wait-and-see mode. Other market participants, especially, sellers, are unsure the strategy will work as demand for scrap is strong worldwide. 


Portland’s weekly dock Davis Indexes were mostly flat with #1 HMS increasing by $1/gt to $293/gt delivered and P&S 5ft unchanged at $304/gt delivered. The index for shredder feed climbed by $2/gt to $230/gt delivered.


The San Francisco Davis Indexes were rangebound with limited upside as HMS #1 rose by $3/gt to $292/gt delivered, P&S 5ft climbed by $1/gt to $301/gt delivered, and shredder feed trended flat at $200/gt delivered. 


The weekly Davis Indexes for dock prices in Los Angeles increased on #1 HMS by $10/gt to $299/gt delivered, P&S 5ft rose by $6/gt to $309/gt delivered, and shredder feed rose by $13/gt to $206/gt delivered. Los Angeles dock indexes have surpassed those in Portland and San Francisco after lagging previously.


Container prices continued north for the eleventh consecutive week with HMS 1&2 (80:20) increasing by $40/mt from $360/mt fas last week to $400/mt fas this week. HMS 1&2 (80:20) containerized is trending higher by $150-155/mt compared to early October.

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