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

US West Coast ferrous scrap dock prices jumped in Los Angeles, remained unchanged in San Francisco, and climbed moderately in Portland. Limited availability of containers is also prompting sellers to expect additional interest in scrap via bulk vessels. 


The region finds scrap demand from both domestic mills in the Southwest to Texas as well as export demand from Asian and Mexican mills, which are pursuing scrap purchases not only due to improved production schedules but limited scrap processing domestically. Tight scrap inventories and flows continue throughout the West Coast as industrial sources are still reporting scrap production levels at 50-60pc, compared to the same period a year ago. Additionally, some scrap sellers believe that prices could warrant further hikes on high iron ore prices.


The Los Angeles docks have made three price increases in November with some deals still above list prices as they seek to attract demolition volumes and larger quantities. The latest increase today, averaging near $50/gt, is substantial for a market that has been trending below the other regions. 


Several scrap buyers stated that pricing at the docks is dynamic and currently a sellers’ market with deals attracting more payment. US domestic scrap prices are expected to increase by $50-60/gt on deals that increased by $70-85/gt during the early December trading period. Docks are competing with domestic mills for scrap inventories. 


The latest deal at $421/mt cfr Turkey on HMS 1&2 (80:20) with limited scrap offers to Turkish mills from US exporters has many expecting deals between $440-450/mt cfr on the grade for March shipments. A deal in that range would be about $92-104/mt higher from late November-early December deals for January shipment. Higher Turkish deals continue supporting the strong global scrap market with export prices in the EU, US, Japan, Russia, and Latin America elevating. Davis Index’s EU dock prices for HMS 1&2 (80:20) increased by $43/mt over the past week while UK dock price index increased by $13/mt in the same period. 


Domestic scrap prices in India and Turkey continue moving up, supported by import scrap prices and in turn, limited domestic scrap inventories are seeding higher import scrap prices. Pakistan and Bangladesh are encountering higher import prices, but buyer interest is weakening on uncertainty and risk. Domestic scrap prices in South Korea are expected to increase despite a flat trend this week. Higher domestic finished steel prices are expected to drive increases in Taiwan’s and Vietnam’s domestic scrap prices. 


The weekly Davis Indexes in Portland increased as docks provided additional incentive to draw larger scrap volumes. The index for #1 HMS increased by $6/gt to $292/gt delivered and P&S 5ft climbed by $7/gt to $304/gt delivered. The index for shredder feed rose by $2/gt to $228/gt delivered. Some yards received unchanged pricing over last week. 


The San Francisco Davis Indexes remained unchanged this week with HMS #1 at $289/gt delivered, P&S 5ft flat at $300/gt delivered, and shredder feed stable at $200/gt delivered. 


The weekly Davis Indexes in Los Angeles increased substantially as #1 HMS jumped by $52/gt to $289/gt delivered, P&S 5ft climbed by $51/gt to $303/gt delivered, and shredder feed rose by $21/gt to $193/gt delivered. Los Angeles dock prices have historically lagged behind other docks such as Portland and San Francisco. Local buyers with apparent destinations via rail to domestic mills have been aggressively outbidding the docks, while Mexican mills have also been booking containers in the region.


Container prices continued north for the tenth consecutive week but with a substantial leap as HMS 1&2 (80:20) increased by $50-55/mt from $305-310/mt fas last week to $360/mt fas this week. HMS 1&2 (80:20) containerized is trending higher by $110-115/mt compared to early October and $100/mt compared to early November. P&S 5ft container deals are reported at $385-390/mt fas. Container shortage reports continued as the region struggles with tight scrap inventories and strong export demand. Unbalanced trade has skewed container availability and increased freight prices.

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