US West Coast and Houston dockside ferrous scrap prices declined slightly this week amid persistent market uncertainty caused by the COVID-19 pandemic.
New state-level dictums may limit employee activity and domestic trading. Moreover, the decelerating economy’s effects on Asia, as well as rising freight rates and other as-yet unknown factors on shipping line availability, are affecting both the container and bulk markets. In tandem with limited export sales, foreign buyers are hesitant to purchase until they receive further information about how the US ferrous market—as well as the overall economy—evolve in the near future.
According to several scrap dealers, doors are presently open to scrap sellers. However, should their doors temporarily close, they intend to keep internal operations crews employed, although several noted the looming possibility of permanent layoffs.
Several bulk shippers intend to fulfill bulk vessels slated to depart in one to two weeks.
Several scrap yards expressed concern that prices may drastically decrease April 1 if the current situation persists. Some estimate buying prices could decline by as much as $40-50/gt, which would encourage sellers to adopt holding positions. In Houston, unless buyers initiate trade, uncertainty has rendered purchasing activity sluggish. The possibility of prices soon decreasing has frozen activity.
In Los Angeles, the Davis Index for HMS 1&2 (80:20) decreased by $13/gt to $143/gt delivered, while the index for P&S 5t decreased by $12/gt to $154/gt delivered, and the index for shredder feed decreased $6/gt to $102/gt delivered.
In San Francisco, the Davis Index for HMS 1&2 HMS 1&2 (80:20) decreased by $2/gt to $183/gt delivered, while the index for P&S 5t decreased by $2/gt to $193/gt delivered, and the index for shredder feed decreased $2/gt to $113/gt delivered.
In Portland, the Davis Index for HMS 1&2 (80:20) decreased by $2/gt to $201/gt delivered, while the index for P&S 5t decreased by $2/gt to $213/gt delivered, and the index for shredder feed decreased $3/gt to $133/gt delivered.
The indexes in Houston decreased with HMS 1&2 (80:20) declining by $8/gt to $200/gt delivered, P&S 5t decreasin by $5/gt to $235/gt delivered, and shredder feed decreasing $2/gt to $133/gt delivered.