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

US West Coast ferrous scrap dock prices were flat on Tuesday after decreasing in the prior week amid a decline in export prices and slower inquiries from Asian buyers. 

 

Prices of bulk and containerized export scrap to Asian markets continued softening. However, several market participants believe that global scrap prices may have bottomed out thereby making further dock price decreases unnecessary. Some sellers expect negotiations for late August and September bulk shipments into Asian markets to achieve strong prices, especially, if Turkish import prices trend flat with the possibility of increases. 

 

Several sellers on the West Coast—which is heavily influenced by competing Japanese scrap export offer prices—noted the short-term price pressure on US-sourced scrap as Japanese domestic prices and offers declined. Sellers noted that lower bids for Japanese scrap are not being accepted by Japanese traders, which is directing inquiries for US scrap. A bulk buyer confirmed that the Japanese market is resisting another price drop. 

 

Lower domestic prices may still trend in South Korea and other Asian markets but are expected to be short-lived. Moreover, tighter scrap availability on the West Coast and in other global regions could support the move to higher export deal prices as July progresses. 

 

The weekly Davis Indexes in Portland declined for HMS 1&2 (80:20) by $2/gt to $176/gt delivered dockside and decreased for P&S 5ft by $1/gt to $186/gt delivered. Shredder feed held at $133/gt delivered after the $22/gt fall from $155/gt delivered in the previous week.

 

Domestic mills in the US Northwest are expected to trade slightly soft during the July trading week, which began on Tuesday. Dock prices are expected to remain unchanged in the short-term as mill scrap prices are still substantially more attractive than dock prices. 

 

In Los Angeles, the weekly Davis Indexes remained unchanged across most grades after a downward price adjustment two weeks ago. HMS 1&2 (80:20) increased by $1/gt to $137/gt delivered dockside, while the index for P&S 5ft was flat at $156/gt delivered and shredder feed increased by $1/gt to $97/gt delivered.

 

The weekly indices in San Francisco remained unchanged across all grades with HMS 1&2 (80:20) at $179/gt delivered dockside, P&S 5ft at $190/gt delivered, and shredder feed at $131/gt delivered.

 

Containerized HMS 1&2 (80:20) scrap has decreased by $5-10/gt to $200-210/mt fas from $210-215/mt fas. However, the decreases are better than the $195-200/mt fas possibility that was expressed by some sellers last week. Asian buyers from Taiwan and India are actively buying at the $200-205/mt fas level giving many the perception that prices have reached the bottom and that demand will improve during the month.

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