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

The monthly domestic ferrous scrap trade finalized in the US on Friday settling sideways to up $10/gt for prime grades, predominantly sideways with a few mills increasing $10/gt on trades for cut grades, and sideways to down $10/gt for shredded, compared to May final prices. Like May, scrap price movement in June also depended on region and mill.


The Midwest markets followed the price trend that began in Detroit with weak scrap demand in certain regions. Settlements moved quickly as some mills had no buying program for June. The Cincinnati-Indianapolis market saw elevated volume activity and most material transacted at flat pricing compared to May levels, including primes. However, the Davis Index for shredded dropped by $14/gt from $259/gt to $245/gt delivered.


Market participants report flows were a bit stronger than demand, which had some mills turning away tons of shredded by mid-week as mill buying programs remain at reduced levels. Reduced activity for automakers, is continuing to impact prime scrap generation as well as low automotive orders for Midwest mills.


In Chicago, the monthly Davis Index for #1 busheling increased by $10/gt from $307/gt to $317/gt delivered. Shredded decreased by $8/gt from $257/gt to $249/gt delivered.


Very few domestic deals were concluded in Philadelphia based on elevated export activity. East Coast dock collection prices are moving toward $220/gt for HMS 1&2 (80:20) with some docks paying $230/gt delivered, which is close to or above domestic levels of around $220/gt delivered for the material.


Southeastern US traded predominantly sideways with some deals obtaining the $10/gt increase on #1busheling. The increase in prime grades was not uniform as a large mill buyer remained steadfast and purchased all grades at sideways pricing. 


In the Carolinas, the Davis Indexes for #1busheling increased by $6/gt from $305/gt to $311/gt delivered. Purchases on prime grades were reported between $300-320/gt delivered. The HMS 1&2 (80:20) and shredded indexes remained unchanged at $233/gt delivered and $245/gt delivered, respectively. 


In Houston, scrap traded sideways across all grades. Mill offers of decreases on shredded scrap by $10/gt were resisted early in the trading week since feedstock buying prices at yards increased by $5-15/gt ($5-15/nt) over the past few weeks. The monthly Davis Indexes increased marginally in Houston with #1busheling increasing $1/gt from $313/gt to $314/gt delivered while HMS 1&2 (80:20) increased by $3/gt from $235/gt to $238/gt delivered. 


July trading prices are predicted to remain unchanged or decrease as supply and flows improve but a bit faster than demand amid the resumption of mill production. The risk of prices rising is in the cards according to some sellers, but the strength of the increase will be relative to pick-ups in industrial accounts and steel demand increases. June demand will largely depend on mill forecasts of their finished steel goods sales improving. Containerized and bulk ferrous scrap exports are projected to remain strong through June.

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