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

Ferrous scrap collection prices in the northern docks on the US West Coast continued to climb while those in Los Angeles were unchanged. Portland and San Francisco competed more directly with US domestic mills for scrap volumes during the early January trading period.  


The Turkish scrap import daily index for US-origin HMS 1&2 (80:20) inched up by $1.25/mt to $482.50/mt cfr on Tuesday from $481.25/mt cfr on Jan 5. While Turkey has decreased its domestic scrap prices, import scrap prices have been rangebound with slight upticks due to low global scrap inventories and high competing demand.  


Seaborne scrap offers continued firm globally encouraging mills to focus on domestic sources. Indian domestic ferrous scrap prices have fallen in the past few weeks, giving some buyers an opportunity to shift to domestic sources. Indian mills are seeking to assess their steel market strength and the ability of the end consumers to absorb additional raw material costs before taking large import positions. Although global scrap prices are expected to remain strong through 2021 on strong demand and tight supply, small corrections are expected in the next few months. 


Domestic scrap prices have risen in Thailand, Vietnam, and South Korea but have held unchanged in Taiwan. However, with mills focusing on domestic sources on higher imported scrap deals, the inventories in Taiwan are expected to tighten. 


High-priced Japanese scrap export deals and rising offer prices have kept Korean mills away from bulk buys. The higher Japanese-supplier bids are supporting US-based scrap sellers and the short-term outlook is reinforced by the expectation that Chinese mills will continue sourcing scrap from Japan and limit volumes for other buyers. US-origin scrap deals to China are under negotiations and could maintain firm bulk scrap prices for all other Asian buyers.


In Portland, the weekly Davis Indexes for #1 HMS rose by $49/gt last week and by another $29/gt to $373/gt delivered on Tuesday. P&S 5ft rose by the same amount this week to $385/gt delivered. Shredder feed increased by $34/gt to $283/gt delivered. Docks in the Pacific Northwest found themselves competing with regional mills that increased prices during the January scrap trade. 


The San Francisco Davis Indexes gained again after a substantial leap in the first week in January. The index for #1 HMS increased by $14/gt to $367/gt delivered, P&S 5ft rose by $13/gt to $377/gt delivered, and shredder feed climbed by $33/gt to $257/gt delivered. 


The weekly Davis Indexes for dock prices in Los Angeles remained unchanged with #1 HMS at $310/gt delivered, P&S 5ft at $321/gt delivered, and shredder feed inching up by $3/gt to $224/gt delivered. The Los Angeles dock indexes are the lowest in the region. 


West Coast containerized prices trended up in the first week in January but seem to be hitting a peak. Market participants are not sure if a temporary lull may see prices tick down over the next few weeks. HMS 1&2 (80:20) deals out of Los Angeles which were at around $405-425/mt fas in late December, moved predominantly $410-420/mt fas last week and continued in the range. Container availability in the region has also affected transactions. 

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