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

Export yard ferrous scrap prices on the West Coast declined across all ports as docks sought relief from sellers. In some cases, contracts that guaranteed incoming flows saw some scrap sellers striking deals at early January levels while others had to absorb lower buying prices. 


However, some market participants noted that though some dock buyers referenced drops of $90/gt and others thought declines at around $70/gt were warranted based on recent market trends, dock price declines have averaged $30-50/gt depending on buyers, volume loads, and the overall need to fill vessel commitments in February. 


In Los Angeles, the docks announced another round of $20/gt drops across all grades at the end of last week for some sellers and proceeded to make the pricing effective to additional sellers early this week. The #1 HMS grade more effectively reflected the lower buying price while P&S 5t resisted the new decline through the week. 


Some market participants believe that an additional decline of $20/gt may be announced as containers and bulk scrap deals continue declining in the export market, yet others believe that the market may begin climbing again after China returns to active scrap import buys after the New Year Lunar holiday that ends on Feb 22. 


Asian buyers are quiet, and news of the latest South Korean bulk buy at substantially lower prices from the US West Coast is keeping export sellers focused on filling pre-sold orders. Some sellers have adjusted prices slightly downward but given limited demand, several noted a preference to not actively make offers. 


Japanese export scrap offers are being reported at decreases of about $10/mt from a week ago and domestic mills have reduced domestic scrap buying prices. With the main buyers in Taiwan, South Korea, and Vietnam likely to seek scrap at reduced bidding prices, US export prices will remain under pressure at least for the next few weeks. Lower bidding prices will likely continue placing pressure on dock prices. 


In Portland, the index for #1 HMS dropped by $13/gt to $345/gt while P&S 5ft fell by $12/gt to $356/gt delivered. Shredder feed decreased by $18/gt to $255/gt delivered. Mills were heard discussing prices at down $50-60/gt on secondary grades against January settled prices. 


Regional sellers expected declines in domestic prices, but several noted an expectation of down $30-60/gt with hopes of movements in the bottom of the range and still a strong export market. While prices declined, docks have ensured feedstock with some sellers guaranteeing 50-90pc of the output towards docks instead of domestic mills. 


The San Francisco weekly Davis Indexes declined for the third week in a row on Tuesday and encountered wide buying ranges as some sellers retained January pricing and others adjusted to the latest market conditions. #1 HMS dropped by $7/gt to $326/gt delivered and P&S 5ft fell by $10/gt to $334/gt delivered. The shredder feed index declined by $9/gt to $212/gt delivered. 


The weekly Davis Indexes for dock prices in Los Angeles trended down with #1 HMS declining by $20/gt to $270/gt delivered and P&S 5ft dropping by $13/gt to $288/gt delivered. Shredder feed absorbed a larger decline, falling by $28/gt to $178/gt delivered as the docks focused on prepared scrap selections. 


HMS 1&2 (80:20) containerized prices in Los Angeles have also trended down in line with global market cues. Container shortages have made deals impossible, according to some market participants, in an environment where the overall demand has weakened. The grade is being heard wide at $310-345/mt fas down from $340-350/mt fas, reflecting declines of $30/mt from the bottom of the range and $5/mt from the top of the same range. Market participants continue to report limited interest for #1 busheling or P&S 5ft.

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