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

Several markets have followed the trend established in Detroit and the Midwest for September ferrous trade this week. Still, some price moves are diverging from the down $50/gt trend on #1 busheling or other prime grades as well as the down $25/gt trend on secondary material such as P&S 5ft, #1 HMS, and shredded, both against August settled prices.


The Philadelphia region has been among the softest markets for several months on continued low buying programs. However, the current downtrend for primes is less pronounced in this region that observed $40/gt declines over August levels. This places #1 busheling at $530/gt delivered Philadelphia consumer for September.


Prime grades decreased by $10/gt during Philadelphia’s August trading while other markets exchanged #1 busheling at unchanged levels against July. The cumulative effect is the minus $50/gt encountered by others this month. The same dynamics are present in some regions of the Southeast that encountered softness in some prime deals in July. 


Heading toward the East Coast some mills close to Philadelphia are buying secondary grades, such as #1 HMS and P&S 5ft at $20/gt decreases against last month while other indicators confirm secondary grades in that region including shredded are selling at $25/gt lower than August.


There is some resistance to the price trends in the Midwest as settlements were still ongoing on Sep 3. However, on average the downward levels are in line with initial numbers launched at down $50/gt for primes and $25/gt on secondary grades.


Chicago markets see primes down $50/gt but #1 HMS is oversupplied and from Chicago to the Quad Cities regions, the grade is struggling to find homes. A mill located south of Chicago is offering down $30/gt for #1 HMS. While P&S 5ft is in higher demand and may settle at down $20/gt as opposed to down $25/gt.


Shredded is often in tight supply in Chicago as Southside Recycling’s shredder is still not operating. Enough mills in and near the Chicago area are in need of shredded and are pursuing the grade at down $10-15/gt while some large deals have been reported at sideways prices.


South and southeast scrap dealers anticipate a continuation of the minus $25/gt on secondary grades and $40-50/gt down on prime grades, though some cities with surplus secondary grade inventories, such as Houston, may see some deals pushed down $30/gt in September against August settled prices. The #1 busheling index in Houston could move to $590-600/gt delivered as #1 HMS trends to $400/gt delivered and P&S 5ft moves near $435/mt delivered.

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