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

Dock prices on the US West Coast trended mostly sideways in Portland and Los Angeles but increased in San Francisco. Export demand has consistently firmed up over the past month.


West Coast market participants noted dockyard may continue buying scrap at higher prices to fill planned orders in March. However, they remain concerned over deal prices and demand in the second half of March and in April given the latest development on iron ore prices. The news has caused some softening in the overseas ferrous market with deals on the West Coast experiencing a pause as buying Asian mills wait for further information and those that remain active have lowered their bids.


Imported iron ore prices in China fell by about $10/mt to $163/mt cfr for Fe 62pc, after the Tangshan government issues an environmental alert. Futures prices have also fallen on the expectation that Chinese provinces may place production suspensions on steel mills over environmental concerns. Lower iron ore prices may soften global ferrous scrap prices following the trend of a softening import billet market and declining domestic finished steel prices in China. 


The daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) fell by $1.09/mt to $456.41/mt on Tuesday from $457.50/mt cfr on Mar 2. The Turkish Index has increased substantially over the past month as mills continue to place orders on strong finished steel demand. However, Turkish mills are resisting higher offers.


The recent increases in EU and UK dock prices slowed as Turkey mills held tight to not accepting higher import scrap offers and South-Asian buyers lowered their bids, though they have not been accepted yet. However, the fall in imported iron ore prices and buying import billing prices in China may place some pressure on sellers to concede to lower-priced deals. On the other hand, several market participants expect a steady demand for imported scrap from emerging Asian markets where domestic growth has continued to strengthen. 


Tokyo Steel in Japan has kept its local buying prices unchanged but Japanese sales are facing limited growth in the domestic market. Given the expectation by import buyers of lower prices and potentially softer domestic buying prices, Japanese exporters may begin negotiating lower deals. Reduced export offers from Japan would also place pressure on the US exporters to soften prices. Moreover, as the weather improves, feedstock may increase scrap inventories and alleviate some pressure on the supply side. 


The weekly Portland Davis Indexes were rangebound with mild increases. The index for #1 HMS climbed by $3/gt to $370/gt delivered. P&S 5ft and shredder feed both rose by $2/gt to $381/gt delivered and $274/gt, respectively.


In San Francisco, the weekly indexes for #1 HMS climbed by $18/gt to $328/gt delivered as P&S 5ft rose by $15/gt to $339/gt delivered. The shredder feed index increased by $8/gt to $218/gt delivered. 


The weekly Los Angeles Davis Indexes at docks held unchanged with #1 HMS at $293/gt delivered, P&S 5ft at $317/gt delivered, and shredder feed at $197/gt delivered. 

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