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

The Houston and West Coast export yard buying price indexes remained flat this week amid uncertainty in the export market.


Several market participants in Los Angeles noted that, given the low price levels at the docks and with containers, their scrap yards would abide stay-at-home orders and suspend processing facilities for up to two weeks while awaiting additional market information. 


News early this week that Turkish mills achieved imported scrap deals at prices $25-30/gt above previous deals has indicated to the global market that scrap supply is tight. Moreover, it initiated rising scrap prices, which have declined for the past four weeks. Asian buyers continued completing deals for May and June delivery, however, activity has decelerated compared to typical levels because their domestic markets are facing lockdowns, fallen finished steel demand, and logistics bottlenecks.


Market participants in Los Angeles said more inquiries for May and June deliveries have come from Asian buyers, pointing to potential demand from Asian mills, which could be planning production levels for when lockdown orders are lifted.


The Houston indexes were unchanged on Tuesday with HMS 1&2 (80:20) at $114/gt delivered, P&S 5ft at $139/gt delivered, and shredder feed at $99/gt delivered.


In Los Angeles, the Davis Index for HMS 1&2 (80:20) dropped by $4/gt to $139/gt delivered, while the index for P&S 5ft was flat at $154/gt delivered, and the index for shredder feed decreased by $9/gt to $88/gt delivered. Dock buying price declines were announced on April 1, but whether or not there were actual declines was contingent on relationships with the dealers. While the other two scrap grades declined compared to last week, P&S 5ft remained unchanged as Asian buyers show a preference for better grades.


In San Francisco, the Davis Index was also unchanged, with HMS 1&2 HMS 1&2 (80:20) at $140/gt, P&S 5ft at $152/gt delivered, and shredder feed at $106/gt delivered. 


The Davis Indexes in Portland remained unchanged this week amid rampant uncertainty in Asia-bound export markets. HMS 1&2 (80:20) was flat at $152/gt delivered, P&S 5ft remained at $161/gt delivered, and shredder feed was at $104/gt delivered.


In the US domestic scrap market, which influences Houston dock prices, docks were quiet over the past week because of uncertainty in both the export and domestic markets. Mills and sellers contended with ambiguity regarding domestic buying prices. Expectations fluctuated between a decline of $40-80/gt for April compared to March settled prices. The soft demand resulting from shutdowns throughout industries placed downward pressure on prices that had some seriously fearing the large drops in the spectrum. 


Detroit mills finally launched trading this afternoon with scrap grades such as shredded and P&S at a discount of $50/gt, compared to March settled prices, and busheling discounted at only $30/gt compared to the previous month. The latest Turkish deal, as well as increased inquiries by Asian buyers, is expected to cause dock prices to rise over the next few weeks, despite COVID-19 risks.

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