US West Coast dockside ferrous scrap prices continued rangebound for the third successive week. The docks at San Francisco and Portland did not decrease prices but Los Angeles announced a reduction of $10/gt on cut grades, shredded, and shredder feed.
The UK and EU dock prices declined on weaker export prices and lower demand from Turkey this week, while the limited Japanese Kanto scrap auction, which declined by only $11/mt, recently gave strength to the Asian ferrous import market expectations. Tokyo Steel has raised some finished steel prices while maintaining its weekly ferrous scrap purchase prices. Japan is the first source for Asian buyers for bulk ferrous, hence, the strong pricing gives US exporters the possibility to compete.
The weekly Davis Indexes in Portland remained unchanged with #1 HMS at $385/gt delivered, P&S 5ft at $405/gt delivered, and shredder feed at $290/mt delivered export yard. Regional market participants note that docks have kept prices rangebound to attract inventories given the strong US domestic market despite the softer outlook for the September trading week.
Many scrap dealers believe that Asian markets will increase their buying interest as fall begins and mills face fewer energy curtailments in domestic markets and construction projects resume in less heat.
The San Francisco weekly Davis Indexes remained unchanged with #1 HMS at $386/gt delivered, P&S 5ft at $400/gt delivered, and shredder feed at $288/gt delivered.
In Los Angeles, the Davis Indexes for #1 HMS and P&S 5ft both fell by $5/gt to $335/gt and $348/gt delivered, respectively. Shredder feed declined by $8/gt to $246/gt delivered. Still, sellers inform that those with volumes did not reduce their prices. In some cases, depending on the volume and quality, #1 HMS could have garnered up to $375/mt delivered to port in the past week.
Some market participants note that COVID-19 related lockdowns seem to be prolonging the bubble that will inevitably require more inventories imported from the US West Coast, especially as domestic supplies tighten on limited physical mobility by peddlers in some importing markets. Countries and companies are also developing processes and systems to better manage production and projects around lock-down policies.
The Davis Index for US-origin HMS 1&2 (80:20) fell by $4.97/mt to $449.85/mt cfr Turkey on Tuesday from $454.82/mt cfr on Aug 17. East Coast docks have continued their downward trend, except for shredder feed, which in some cases has gained in the past few weeks, on the lower Turkish deals and import prices. On the West Coast, though, the anticipation of recovering Asian markets in a tight global scrap environment may buoy ferrous bulk prices.