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

Davis Index’ weekly northern Spain HMS 1&2 and shredded small bulk ferrous scrap indices edged €3/mt ($4/mt) lower over the past week to €225/mt and €235/mt cfr, respectively, on Friday.


While few, if any, new seaborne transactions to Spain have been recorded over the past week, Spanish buyers were understood to have reduced their bids by €5/mt.


Spanish steel producers have been leaning more towards local ferrous scrap suppliers in recent weeks given the significant arbitrage between domestic and seaborne benchmarks.


More recently, however, one bulk ferrous scrap trader commented that domestic E3 ferrous scrap grades had increased €10/mt to €220-225/mt over the past week in response to robust orders.


As a result, this has significantly reduced the domestic E3 ferrous scrap grade discount to seaborne imports of HMS 1&2 to €2/mt this week from €15/mt in the week prior.


While E3 grades are priced on ‘delivered to mill’ basis, import scrap prices are on a cost & freight (cfr) basis, and need to be transported to the plant at an approximate cost of €5/mt.


With the recent strength in domestic and major seaborne ferrous scrap benchmarks, it is unlikely that Spanish mills will be able to realistically maintain their bids at these low levels.


Similarly, Davis Index’ UK small bulk ferrous scrap HMS 1&2 (80:20) and shredded nudged €4/mt over the same period to €203/mt and €213/mt fob, respectively.


Looking forward, Davis Index calculates that Spanish HMS 1&2 (80:20) ferrous scrap import tags could increase up to €240-250/mt, cfr northern Spain, in response to robust hikes in UK and EU dockside purchase prices.


(€1 = $ 1.19)

Leave a Reply

Your email address will not be published.