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

May ferrous scrap trade commenced on Tuesday afternoon after a few Detroit area mills announced unchanged prices for prime grades such as #1 busheling. Mills announced $20/gt increases for secondary grades along with shredded, compared to April settled prices.


These numbers are in line with the general market consensus though some regions expect higher gains on certain secondary grades as they will be moving in lieu of primes that remain tight.  Still, some pockets foresee sideways pricing considering there are some mill outages with reduced programs in various Midwest locations.


Based on the announcement today, #1 busheling in Detroit is expected to trade at $560-570/gt and shredded will increase to $450-460/gt delivered, narrowing a gap that rose to a high point of $120-130/gt last month in that region.


Exports to Turkey have gradually regained traction since mid-April with Turkish imports of US-origin HMS 1&2 (80:20) at $458.10/mt cfr May 4 compared to $433.13/mt cfr on April 26, up $24.97/mt. Active imports will help coastal inventories travel outside the region and limit inbound loads, especially along the East Coast. 


The southern US region is also showing signs of a consistent trend set by Detroit with some hoping for gains worth a few dollars on prime grades once the market settles. In Houston, several sources are anticipating sideways from mills, especially on #1 HMS with sufficient supplies and weaker demand, with potential upside negotiations on shredded and P&S 5ft. 


On the West Coast, some Pacific Northwest mills are heard offering sideways on primes and up $10-15/gt on shredded, P&S 5ft, and #1 HMS. 


The early May ferrous trading cycle is expected to settle by Thursday or Friday this week. 

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