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

US West Coast ferrous scrap dock prices were flat in Los Angeles, San Francisco, and Portland this week. 


The absence of buyers from Turkey is influencing global ferrous transactions. Turkish mills are expected to return to the market as they need scrap volumes but bids for the past two weeks were lower than the $300/mt cfr being offered on HMS 1&2 (80:20). 


Several bulk sellers on the US West and East Coasts believe that despite the downward pressure by Turkish mills, prices could remain unchanged or even increase slightly in the next round of negotiations. The uncertainty around COVID-19 infections has made projections difficult but increased global economic activity and recovery plans, support unchanged or stronger finished steel and scrap prices for many exporters. Some bulk sellers in the UK and EU share the same sentiment despite the short-term softness in the scrap market. 


Buyers from India, Bangladesh, Pakistan, and South Korea finalized limited scrap import deals due to rising prices. Additionally, several buyers from these countries are facing lower domestic scrap prices and weak domestic sales on finished steel. 


In Japan, a competing source for US-scrap, domestic scrap prices remained mostly flat and export offers began to soften by approximately $5-8/mt on #2 HMS or equivalent grades compared to last week. 


The weekly Davis Indexes in Portland increased by $1/gt across all grades with HMS 1&2 (80:20) at $230/gt delivered and P&S 5ft at $239/gt delivered dockside. Shredder feed rose to $191/gt delivered. 


Domestic mills in the region increased scrap purchases by $20-25/gt during the September scrap buying week, against the previous month’s prices. Domestic scrap trading on the eastern side of the US is expected to trade strong sideways to up $20/gt depending on grades and region, but mills prices in the Pacific Northwest could trade sideways to slightly up in October. A pause in increasing export prices for the next two weeks would further cement limited increased offers by domestic mills. 


In San Francisco, the weekly indexes were unchanged for HMS 1&2 (80:20) and P&S 5ft at $246/gt delivered and $252/gt delivered, respectively. Shredder feed held at $165/gt delivered. Scrap yards continue actively selling to the docks that are seeking inventories to fill bulk orders. However, they remain concerned about softening export prices in October. 


The weekly Davis Indexes in Los Angeles were rangebound for the fourth consecutive week with HMS 1&2 (80:20) at $187/gt delivered dockside, P&S 5ft at $203/gt delivered, and shredder feed at $146/gt delivered, respectively. 


The containerized market in Los Angeles increased last week by $15-20/mt but prices have started to soften by $5-10/mt as HMS 1&2 (80:20) trades are now at $265/mt fas compared with $270-275/mt fas last week. Market participants continue reporting tight scrap inventories alongside a slowdown in export deals after buyers retreated at higher prices. Some are returning this week with lower bids while other mills have sufficient scrap inventories or are supplementing their short-term supply with domestic scrap until there is more clarity on imported scrap prices.

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