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

US containerized scrap prices continued their upward trend that began in October. Prices will continue to increase amid high demand due to scrap scarcity because of lower demolition projects, substantially reduced oil rig work, decreased vehicle shredding volumes, and lower peddler activity. 


The shortage in containers may be a limiting factor in the upward price trend as they impact logistics, especially since Vietnamese and South Korean mills have opted for bulk scrap buys over the past few weeks. 


Japanese export offers increased by $10-15/mt against the prior week supporting US export prices. Vietnam is facing stronger domestic finished steel sales including those of rebar, thereby, requiring restocking of ferrous scrap. Taiwanese mills are also succeeding in raising finished steel prices on increased raw material prices. Some Asian mills are also searching for ferrous scrap from other destinations other than the US due to container shortage and increased freight rates. 


Bangladeshi and Pakistani buyers are actively inquiring about scrap despite the higher prices due to improving steel demand in their respective countries. Indian domestic scrap prices are inching up supported by rises in sponge iron tags. Several Indian buyers acknowledged to Davis Index that prices could potentially climb higher through December on limited global scrap inventories. Indonesian buyers are making limited inquiries at present due to domestic registration deadlines. 


US domestic scrap prices increased by $50-90/gt against November settled prices after the December trading week launched on Wednesday. The East Coast traded at up $50-60/gt depending on grade against November settled prices and Detroit increased by $70/gt across all grades. 


In the St. Louis region, #1 HMS, P&S 5ft, and shredded were trading up at $70/gt while prime grades such as #1 busheling increased deals up to $80-90/gt compared to November settled deals on Thursday. In the South trading is expected to settle at around $50-60/gt gains as prices were higher compared to other regions in November. 


Slow scrap flows for feedstock into yards are affecting inventory availability in a period with high demand both from domestic mills and export markets. Turkey, a barometer of the global scrap markets is reporting around $360/mt cfr on HMS 1&2 (80:20) from $292-297/mt cfr in early November deals, up $63-68/mt in the span of a month. 


The weekly Davis Indexes in New York rose for the seventh consecutive week, increasing by $30/mt to $363/mt fas for #1 busheling on very tight inventories and active buys from Asian destinations. The HMS 1&2 (80:20) index increased by $24/mt to $327/mt fas, P&S 5ft rose by $12/mt to $340/mt fas, and shredded rose by $13/mt to $341/mt fas. Machine shop turnings were flat at $263/mt fas as buyers focused on the better grades.


The Davis Indexes in Los Angeles climbed for the eighth consecutive week with #1 busheling and P&S 5ft rising by $12/mt to $322/mt fas and $320/mt, respectively. HMS 1&2 (80:20) and shredded climbed by $9/mt to $299/mt fas and $321/mt fas, respectively. The HMS 1&2 (80:20) index has climbed by $51/mt from $248/mt fas in early October. 


In San Francisco, the index for #1busheling increased by $17/mt to $318/mt fas while HMS 1&2 (80:20) and P&S 5ft both rose by $16/mt to $298/mt and $318/mt, respectively. Shredded climbed by $15/mt to $320/mt fas.


In Seattle, the index for #1 busheling increased by $15/mt to $318/mt fas, HMS 1&2 (80:20) and P&S 5ft both rose by $12/mt to $300/mt fas and $315/mt fas, respectively, and shredded climbed by $10/mt to $315/mt fas. 

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