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

US containerized ferrous scrap indexes increased on the West Coast but were mostly rangebound on the East Coast. 


The weekly Davis Index in New York for #1 busheling decreased by $1/mt to $255/mt fas and fell for HMS 1&2 (80:20) by $1/mt to $234/mt fas. The Davis Index for P&S 5ft decreased by $2/mt to $247/mt fas but increased for shredded by $3/mt to $246/mt fas. The index for machine shop turnings held at $211/mt fas. 


Sellers and buyers report a relatively unchanged export market off the East Coast that encountered active inquiries and buys from Asian buyers. Scrap flows are considered adequate against demand in this region. 


The West Coast, on the other hand, benefited from tighter scrap supply in the region and the effect from China not exporting as much steel into neighboring markets, preferring instead to import the material from Taiwan, Vietnam, India, and Pakistan. The resulting demand shift is expected to support mills throughout Asia that are struggling to improve capacity utilization. The overall demand support from China is also expected to overflow into other aspects of Asian economies. 


Moreover, several bulk negotiations for South Korea and Taiwan have been postponed making containers more attractive now given the uncertainty. Expectations for H2 2020 production results range from incrementally improving through the next two quarters, to a large South Korean mill slowing bulk imports given the plausibility that H2 2020 may be worse than H1. 


The higher imports of Japanese finished steel products that are flooding the market remain a strong concern in Korea. Traditionally, Japanese import prices were higher but the spread between import and domestic prices has narrowed as Japanese exporters seek new market placements because of weaker demand in its domestic market and in the US and EU export markets.


Rising Japanese scrap export offers are also supporting US container export prices to Asia. Tokyo Steel began to increase domestic scrap buying prices at one site with the remaining sites expected to follow. Domestic scrap in South Korea is expected to bottom out over the next couple of weeks, also supporting higher import scrap prices. 


In Los Angeles, the weekly Davis Indexes for #1 busheling increased by $12/mt to $239/mt fas while HMS 1&2 (80:20) rose by $12/mt to $218/mt fas. The index for P&S 5ft increased by $11/mt to $232/mt fas, while shredded went up by $12/mt to $233/mt fas.


The Davis Indexes in San Francisco increased by $8/mt to $233/mt fas for #1 busheling and rose by $10/mt to $215/mt for HMS 1&2 (80:20). The index for P&S 5ft increased by $9/mt to $229/mt fas, and the index for shredded increased by $9/mt to $229/mt fas.


The weekly Davis Indexes in Seattle increased for #1 busheling by $12/mt to $235/mt fas, and HMS 1&2 (80:20) rose by $11/mt to $219/mt. The indices for P&S 5ft and shredded ticked up by $13/mt to $233/mt fas and $233/mt fas, respectively.

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