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

US containerized scrap prices climbed for the third successive week accumulating robust increases in February. 


The upward movement is supported by demand from Asia, Chinese activity in the steel markets, higher ferrous import prices, pressure on domestic scrap supplies globally, and stronger finished steel demand. These global cues along with higher Turkish import prices are supporting the US export ferrous market.


Bookings are thin from Asian buyers but ferrous scrap prices are rising on higher offers and expectations of increased interest. Inquiries from India have increased over the past week and Japanese export offers, an alternative to US-sourced ferrous scrap, have been heard rising by $30-40/mt against the prior week. Moreover, Chinese traders have been heard seeking P&S5ft and shredded grades urgently and are willing to pay higher prices to compete against other buyers. 


Tight container availability and high freight prices continue affecting the market as pricing depends on booking and container lines. Some market participants commented that scrap yards are caught between the availability of bookings and immediate loading versus just an evaluation on price negotiated. 


The weekly Davis Indexes for containerized scrap in New York jumped by $21-29/mt after rising modestly by $9-20/gt last week. The indexes for #1 busheling and shredded rose by $23/mt to $441/mt fas and $419/mt fas, respectively. HMS 1&2 (80:20) increased by $28/mt to $398/mt fas while P&S 5ft climbed by $21/mt to $422/mt fas. The index for machine turnings went up by $29/mt to $357/mt fas after remaining unchanged in the prior week.


In Los Angeles, the weekly Davis Indexes leaped by $39-44/mt this week after the more limited rise of $16-20/mt in the prior week. While #1 busheling climbed by $44/mt to $421/mt fas, the indexes for HMS 1&2 (80:20) rose by $39/mt to $388/mt fas. P&S 5ft and shredded both increased by $40/mt to $411/mt fas. 


The index for HMS 1&2 (80:20) in Los Angeles has risen by $67/mt since Feb 4. Busheling offers by some scrap dealers are $20/mt above the indexed price as US domestic mill prices via rail are more attractive than export at present. Several regional scrap dealers also noted that given the upward pricing expectation for March, they are holding on to scrap inventories for negotiations next week. In fact, several dealers disclosed that negotiations had the potential to close early next week in the $400-405/mt fas range on HMS (1&2) 80:20. Some market participants expressed the possibility of prices climbing by another $10-15/mt next week. 


In San Francisco, the weekly indexes rose by $45-49/mt this week with #1 busheling rising by $45/mt to $413/mt fas and HMS 1&2 (80:20) climbing by $47/mt to $380/mt. P&S 5ft and shredded rose by $49/mt fas to $405/mt fas and $403/mt fas, respectively. Market participants reported that obtaining containers was a struggle and that they were focusing on fulfilling old orders this week. 


The Davis Indexes in Seattle gained $32-40/mt this week. The index for #1 busheling climbed by $40/mt to $410/mt fas while HMS 1&2 (80:20) increased by $37/mt to $385/mt fas. P&S 5ft climbed by $32/mt to $400/mt fas and shredded trailed, climbing by $33/mt to $398/mt fas.


Global scrap prices are being supported by Turkey’s imported scrap buying prices. The Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) climbed by $33.43/mt to $453.43/mt cfr on Thursday from $420/mt cfr on Feb 18. The Turkish index has increased by $44.05/mt against $409.38/mt on Feb 1.

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