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

US West Coast ferrous scrap dock prices were rangebound on Tuesday after a solid decline last week. Docks in Los Angeles, Seattle, and Portland mostly maintained their dock prices as container and bulk sales to Asian markets resumed after the Golden Week holiday in those countries.


However, uncertainty reigned with sellers’ opinions varying on price movements as Asian buyers returned from the holiday. With firmer export scrap prices and increased inquiries from Asian buyers this week, dock price indexes are expected to trend flat to up for the remainder of the month. 


Japanese export scrap prices firmed up by $5-10/mt depending on destination amid support from Chinese scrap demand. Destinations such as Pakistan, Bangladesh, India, and Vietnam are encountering some recovery against the recent weak steel demand, which will support an increase in imported scrap activity. South Korea and Taiwan are contending with flat or weak finished steel demand but could increase scrap import inquiries to supplement domestic buys.


Malaysia and Thailand are expected to strike deals for imported scrap despite concerns with the local economic drivers and sluggish finished steel demand. As mills target local scrap supplies, domestic prices may increase as inventories dwindle, thereby, supporting higher scrap import prices from Japan, the US, and Russia.


The weekly Davis Indexes in Portland decreased for a second consecutive week. HMS 1&2 (80:20) slipped by $8/gt to $218/gt delivered while P&S 5ft and shredder feed declined by $1/gt to $234/gt and $186/gt delivered, respectively. 


Scrap buying offers from regional mills in the Pacific northwest were sideways in October as docks buying prices declined. Several sellers expected an upward adjustment to the latter this week, but others attribute the slight decline to softer scrap price expectations in November trading. Although, given the upward trend in export demand and prices along the West Coast, Portland may find it necessary to adjust prices upward within the month.


In San Francisco, the weekly indexes were rangebound with HMS 1&2 (80:20) and shredder feed increasing by $1/gt to $238/gt delivered and $157/gt, respectively, and P&S 5ft decreasing by the same amount to $246/gt delivered. 


The weekly Davis Indexes in Los Angeles were flat with HMS 1&2 (80:20) unchanged at $183/gt delivered dockside, P&S 5ft holding at $196/gt delivered, and shredder feed declining by $1/gt to $140/gt delivered. 


Dock prices in Los Angeles decreased at the list level in early October. Davis Index was informed that docks had anticipated the need for an additional decline in mid-October but given the upward price trend and increasing demand in a period of tight scrap inventories, the potential price decrease is no longer under consideration this week. 


The containerized market in Los Angeles for HMS 1&2 (80:20), is reported trending flat at $245-250/mt fas. Given the higher inquiries being heard this week along with a quiet return by a Turkish mill at higher bid prices than previous deals, and tight scrap inventories, container prices could increase over the next week. 


Moreover, the latest negotiations for Turkish mills for US-scrap are pointing towards a $290/mt cfr deal or higher according to several bulk sellers, supporting the expectation that Asian buyers may begin cementing bulk deals for December deliveries.

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