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

US West Coast ferrous scrap dock prices which began to point up last week continued their uptrend with the northern docks taking a leap on Tuesday after regional domestic mills began to trade.


Domestic mill scrap prices traded sideways in the range of $205-210/gt delivered for HMS 1&2 (80:20) and $215-220/gt delivered for P&S 5ft. Dock prices were markedly behind the domestic mill prices throughout July. Docks have had to increase offers to draw inventories as some scrapyards have not sold to docks for months, instead committing August stocks to mills.


Higher global scrap prices buoyed by better Turkish import scrap prices and buying activity from Asian markets have increased export price expectations off the West Coast. 


The weekly Davis Indexes in Portland increased for HMS 1&2 (80:20) by $17/gt to $202/gt delivered dockside, while P&S 5ft increased in tandem by $16/gt to $212/gt delivered. The index for shredder feed inched up by $8/gt to $154/gt delivered. Docks are actively negotiating with scrapyards for volumes and were reportedly reaching out and adding $15-20/gt to cover long-distance freight.


The weekly Davis Indexes in San Francisco increased robustly on Tuesday after a mild rise last week. HMS 1&2 (80:20) increased by $28/gt to $210/gt delivered dockside, P&S 5ft rose by $21/gt to $213/gt, and shredder feed increased by $10/gt to $143/gt delivered. In the face of domestic purchasing, docks increased prices to lock in inventories and plan to satisfy export demand.


Export demand and prices have increased over the past few weeks with the expectations of the trend continuing through August as Asian countries seek to increase domestic production as they recuperate from the first wave of the COVID-19 pandemic. The forecast for Q3 2020 steel production volumes, demand, and prices continue to remain positive despite fears of a second wave of the pandemic. Competing Japanese export scrap prices are supporting higher prices to Asian destinations. 


In Los Angeles, the weekly Davis Indexes did not change. The index for HMS 1&2 (80:20) and P&S 5ft remained unchanged at $162/gt delivered dockside and $175/gt delivered, respectively. Shredder feed also continued flat at $124/gt delivered. The momentum from the northern ports is expected to create an uptick in LA dock prices.


The containerized market on the West Coast is up for the fourth consecutive week. In Los Angeles, containerized HMS 1&2 (80:20) increased by $10/mt as container prices shifted from $225-230/mt fas last week to $235-240/mt fas this week.


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