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

US West Coast dock prices declined for the second successive week on weaker demand and softer prices.

West Coast indices dropped by $2-10/gt with Los Angeles leading the decreases in the region once again. Still, the declines were lower compared to the $10-15/gt falls witnessed on the East Coast.

Asian buyers continue bidding lower for imported ferrous scrap since countries like South Korea, Taiwan, and Japan have reduced domestic scrap buying prices. Tokyo Steel announced successive price cuts in tandem with announcements of higher flats finished steel prices. Should demand surge as spring begins, strong finished steel prices may help support raw materials.

India, Pakistan, and Bangladesh are reducing their imports of ferrous scrap due to either a holiday or on market uncertainty, depending on the country. US exporters expect prices to adjust over the next few weeks but are forecasting strong demand from the emerging markets in April. The effects of the COVID-19 pandemic have added unforeseen logistics and demand forecasting uncertainties.

With Chinese futures indicating more optimism on Tuesday, demand may increase in Asian markets, pushing imported scrap prices higher.

The daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) slipped by $11.66/mt to $419.17/mt on Tuesday from $430.83/mt cfr on Mar 16. Over the past two weeks, the index has declined by $37.24/mt. Turkish mills are seeking lower-priced deals from the US, Baltics, and the EU but sellers are resisting further discounts given the expectation of additional cargo needs for April shipment and the beginning of the May shipments buying cycle.

The weekly Davis Indexes in Portland decreased for #1 HMS by $8/gt to $354/gt delivered, for PS 5ft by $7/gt to $367/gt delivered, and for shredder feed by $4/gt to $261/gt delivered. A dock source noted that a cautious sentiment at the docks is softening prices. One dock lowered prices by $10/nt with a potential for another decline by Apr 1 while another decreased them by $5/nt and is considering another round by Friday.

In San Francisco, the weekly indexes declined marginally with #1HMS down by $2/gt to $323/gt delivered, PS 5ft decreasing by $3/gt to $333/gt delivered, and shredder feed declining by $2/gt to $215/gt delivered. Market participants expect prices to decline further next week but have assigned strength to the market on the need for fulfillment of previous orders and still tight scrap inventories.

The weekly Los Angeles Davis Indexes for #1 HMS fell by $7/gt to $260/gt delivered with PS 5ft declining by $10/gt to $281/gt delivered. The shredder feed index declined by $25/gt last week but trended mostly flat at $172/gt delivered this week.

After a cumulative decline of $30/gt over the previous two weeks, Los Angeles docks decreased prices by another $10/gt on HMS and PS 5ft. Some market participants speculate additional efforts at downward adjustments by Apr 1 if export demand and pricing do not strengthen.

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