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

US West Coast ferrous scrap dock prices were flat or encountered minor changes on Tuesday, continuing a rangebound trend from last week, as container and bulk scrap continues to be of interest to the Asian markets.


Pakistani and Bangladeshi buyers were heard inquiring for volumes and though they expressed concerns about rising scrap prices sellers were firm on higher offers due to low inventories and adequate expected demand. 


Asian buyers are expected to prefer Japanese scrap export volumes in the short-term as they have softened after Japanese domestic ferrous scrap and finished steel prices trended flat over the past few weeks. However, ongoing Japanese and Russian negotiations are expected to firm up prices from earlier in October due to increasing offers from the US. 


Vietnam, Malaysia, and Taiwan are beginning to face increasing domestic ferrous scrap prices. In South Korea, where pricing trends were mixed in the domestic scrap market this week, scrap tags could firm up on continued reliance on domestic inventories while global prices firm up. 


Asian countries are struggling with continued weak demand for finished steel even though economic recoveries are expected. However, mills are expecting support for finished steel sales as COVID-19 cases decline, stimulus packages begin to take shape, and China’s expected import orders are realized. Of concern is China’s outlook for steel demand this winter since the season is traditionally known for its lower demand. 


With the revived interest in rebar in export markets along with overall domestic economic recovery in Q4, Turkish mills are expected to return to the market for November and early December shipments. Further scrap price discounts on export bulk deals are unlikely in the course of the next two weeks given the expectations of sideway pricing in November, compared to October settled prices, and claims of tight scrap inventories and flows into the winter.


The weekly Davis Indexes in Portland encountered a limited upside after declining for two consecutive weeks. HMS 1&2 (80:20) remained unchanged at $218/gt delivered while P&S 5ft and shredder feed increased by $1/gt to $235/gt delivered and $186/gt delivered, respectively.  


US domestic scrap prices are expected to trend between sideways to strong-sideways for November. The improved expectations in the domestic market along with active interest from the export market are expected to keep dock prices in the Pacific Northwest relatively flat for the remainder of the month. 


In San Francisco, the weekly indexes slightly dampened with HMS 1&2 (80:20) slipping by $4/mt to $234/gt delivered and P&S 5ft decreasing by $1/mt to $245/gt delivered. Shredder declined by $3/mt to $155/mt delivered.  Dock prices turned from a negative sentiment early in October to limited change and are now showing the possibility of slightly higher numbers in some deals for the short term. 


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


The mid-October downward adjustment on dock prices was initiated by Los Angeles docks due to increasing export demand and tight scrap inventories. Market participants report very low scrap inventories at docks and various sellers’ sites, especially to complete orders requiring bonus grade material. 


The containerized market in Los Angeles for HMS 1&2 (80:20) has shifted up by $5/mt from trending unchanged last week at $245-250/mt fas to $250-255/mt fas on Tuesday with the expectation of reaching $260/mt fas by the end of the week. Mexican mills also increased their inquiries for southern California ferrous scrap.

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