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

Final transactions for the April cycle in the US domestic ferrous scrap market wrapped up by Friday following a trend of down $20/gt on secondary grades, with variation based on starting price levels and region. Prime grades were unchanged in most markets with minor deviations.


In Cleveland, #1 busheling remained sideways at $590/gt with Youngstown transactions at $580/gt for the grade. The monthly Davis Index for #1 busheling remained flat at $586/gt delivered Cleveland/Youngstown consumer, while #1 HMS dropped by $20/gt to $400/gt delivered. Secondary grades like P&S 5ft ended at $415/gt and shredded settled at $435/gt delivered.


The market was described as slightly improved in the Cincinnati/Indianapolis region on strong mill demand in some sections near Indianapolis with price strength extending into some of Chicago’s and Detroit’s later transactions.


In Chicago, where the current spread between #1 busheling and shredded has reached $121/gt compared to the average historical gap closer to $30/gt, demand may lessen next month on upcoming outages, though there was enough this week to pull some material from the Indiana corridor also affecting supply in the Cincinnati/Indianapolis market.


 Prime grade #1 busheling transacted at $535-560/gt and settled at $543/gt delivered Cincinnati/Indianapolis consumer. A large portion of P&S 5ft sold at $400-415/gt in the region, with some deals as high as $435/gt while the index ended at $409/gt delivered.


In the Carolinas, the market was also called at minus $20/gt on secondary grades against March settled prices, but probing deeper into transactions, obsolete indexes decreased by a little more than initially expected. The #1 busheling index decreased by $1/gt to $548/gt delivered as #1 HMS dropped by $25/gt to $378/gt delivered. P&S 5ft fell by $26/gt to $395/gt delivered while shredded dropped by $22/gt to $402/gt delivered. The machine turnings index declined by $27/gt to $312/gt delivered.


Texas scrap sales have been completed by some market participants while others are calling it undecided. Some market participants report drops of $20-40/gt on secondary grades against March settled numbers depending on the distance. 


Several large dealers reported doing very little in the way of transactions by Friday afternoon. Some pricing updates indicate deeper cuts accepted by sellers to fulfill transactions. Mills were making offers of down $20/gt when last month they negated the national gains of $45-50/gt in the region. Some speculate the offers were low due to the low need for inventories.


May Outlook 

Market participants’ early outlook detects fewer price movements anticipated for May with prime strength continuing. The latest basic pig iron US import offers from the CIS are flat to up $20/mt at $570-590/mt cfr Nola on tight supply. The material has been in higher demand throughout March and sold as a prime grade replacement as #1 busheling has faded on the continuing semiconductor shortage along with its impacts on the auto industry.

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