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

Export yard ferrous scrap prices on the West Coast declined in San Francisco and Portland. Dock prices remained unchanged in Los Angeles but are expected to decline by the end of the week. 


On the West Coast, Asian buyers are reportedly quiet with most scrap sellers not expecting much activity until after the Lunar New Year holiday that is in mid-February. Strength is expected in scrap into Spring. Japanese export offers have also softened and large South Korean buyers are seeking volumes at lower bids. 


In Portland, the prices for #1 HMS and P&S 5ft fell after docks began to reduce buying prices for scrap dealers who had not ensured guaranteed dock buying prices. The weekly Davis Index for #1 HMS declined by $15/gt to $358/gt delivered and P&S 5ft dropped by $17/gt to $368/gt delivered. Shredder feed absorbed a decline of $21/gt to $273/gt delivered. 


In the US domestic scrap market, which more directly competes with docks in the Pacific Northwest, prime grades are expected to decline by $10-20/gt against January settled prices as #1 HMS and P&S 5ft decrease by $30-50/gt and shredded possibly more on inventory overhang. Market participants commented on the inevitability of dock prices falling further in a week on export and domestic cues.


The San Francisco Davis Indexes declined for the second week in a row on Tuesday. Last week, some dealers were spared the full decline with flat pricing while others began to receive softer prices. This week, however, docks officially provided notice of prices reducing by around $34/gt. Now incorporating the affected sellers as a discrepancy in prices last week, the index for #1 HMS and P&S 5ft fell by $13/gt to $333/gt delivered and $344/gt delivered, respectively. The index for shredder feed decreased by $12/gt to $221/gt delivered. 


The weekly Davis Indexes for dock prices in Los Angeles declined last week but were flat on Tuesday. Several buys were noted at stronger prices than the index for P&S 5ft as the dock sought to shore up volumes. Several market participants report expectations that prices will decline again by about $20/gt by Friday. The weekly indexes remained unchanged at $290/gt delivered for #1 HMS, $301/gt delivered for P&S 5ft, and $206/gt delivered for shredder feed.


Containerized scrap prices for HMS 1&2 (80:20) in Los Angeles are being heard at $340-350/mt fas compared with $385/mt fas last week, down by $35-45/mt. The recent deals are on low volumes of the grade and few bids were heard for #1 busheling or P&S 5ft as the market is slowing in trades. 


Buyers are adopting a wait-and-see approach given the expectation that Turkey may purchase imported scrap of HMS 1&2 (80:20) at prices lower than $400/mt cfr over the week given the recent ex-UK buy at $408/mt cfr on the grade and the rumor of sufficient offers to Asia and Turkey from US exporters.

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