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

US containerized ferrous scrap prices fell in New York after a slight increase last week but were rangebound on the West Coast on Thursday. 


Several sellers reported a shift towards higher prices, especially in Los Angeles, on HMS 1&2 (80:20) as deals that were quoted at $385/mt fas last week moved to $395-400/mt fas today. In the same region, several market participants reported continued lower bids from some buyers with attempts at $400-410/mt fas on the P&S 5ft while sellers’ expectations were $10-20/mt above those levels given successful placements in the past few days. 


The New York weekly Davis Index for #1 busheling fell by $6/mt to $494/mt fas with the other four grades dropping more. HMS 1&2 (80:20) and P&S 5ft lost some of the gains last week with downward adjustments of $13/mt to $446/mt fas and $470/mt fas, respectively. Machine shop turnings and shredded both contracted by $12/mt to $414/mt fas and $468/mt fas, respectively. Buyers that bought near $480/mt fas early last week actively reduced their bids in the region. 


The weekly Los Angeles Davis Indexes for #1 busheling and HMS 1&2 (80:20) rose by $1/mt to $438/mt fas and $390/mt fas, respectively. P&S 5ft trended unchanged at $427/mt fas while shredded firmed up by $3/mt to $430/mt. Last week several market participants noted the possibility of price momentum over the next two weeks, and some of that movement became evident by Thursday. 


However, a few buyers expressed some concerns that the momentum would likely be limited due to the softness in Japanese domestic scrap prices and the drop in iron ore prices last night, especially, if numbers remain low on a prolonged basis.


Japanese domestic ferrous scrap prices reduced this week after an $11/mt drop in Kanto tender prices. Market participants in the US West Coast noted that the Kanto Tender was better than they expected and limits the downward pressure on US exporters. 


Taiwan and Vietnam are facing higher containerized cfr offer prices this week. As demand recovers, Asian buyers may engage in trades that have now been delayed a few weeks given the uncertainty in demand for finished steel due to COVID-19 lockdowns and some softness in iron ore prices.


Bangladesh, Pakistan, and Indian buyers are trading limited loads in the import market. Still, buyers are expected to return to purchase ferrous scrap by early September for October and November deliveries with some ramp up in steel production and the end of holidays along with the end of seasonal constraints in electricity usage at mills and construction activity. 


The San Francisco Davis Indexes for #1 busheling dropped by $1/mt to $428/mt fas. HMS 1&2 (80:20), P&S 5ft, and shredded were flat at $384/mt fas, $420/mt, and $421/mt fas, respectively.


In Seattle, the Davis Indexes remained unchanged with #1 busheling at $423/mt fas, HMS 1&2 (80:20) at $380/mt fas, P&S 5ft at $418/mt fas, and shredded at $419/mt fas.


The latest US-origin import scrap deal to Turkey shifted the US-origin HMS 1&2 (80:20) index down by $0.83/mt to $454.88/mt on Thursday from $455.71/mt cfr on Aug 12. The US domestic September ferrous trade continues with an expectation of soft sideways with prices declining by $10-20/gt depending on the region. A few market participants expect a flat trend with a narrower possibility of price drops of up to $30/gt across all grades including primes such as #1 busheling.  


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