US containerized ferrous scrap indexes increased on both coasts on continued strong sentiment due to Turkish import scrap prices, tight scrap inventories globally, and continued demand from Asian countries.
Containerized scrap in Los Angeles and New York gained after a pause last week when some buyers hesitated on closing deals on concern over higher scrap prices amid the still developing finished steel market demand in the countries of origin.
Higher import activity from China, stimulus efforts, seasonal construction activity, and more economic activity globally are also supporting expectations of more steel production and corresponding raw materials prices.
The weekly Davis Indexes in New York increased with #1 busheling rising by $10/mt to $286/mt fas, HMS 1&2 (80:20) moving up by $5/mt to $263/mt fas, P&S 5ft climbing by $9/mt to $282/mt fas, and shredded increasing by $5/mt to $277/mt fas. The index for machine shop turnings rose by $3/mt to $235/mt fas.
In Los Angeles, the Davis Indexes for #1 busheling and HMS 1&2 (80:20) increased by $11/mt to $273/mt fas and $251/mt fas, respectively. The index for P&S 5ft rose by $10/mt to $270/mt fas while shredded scrap climbed by $12/mt to $272/mt fas.
The spread between HMS 1&2 (80:20) and better grades such as P&S 5ft increased again this week after narrowing in transactions last week. Sellers report higher inquiries by buyers and tight scrap inventories, which, in turn, are supporting higher prices.
West Coast sellers expected prices to rise by $10-15/mt on containers, as the end of the month approached, on stronger Japanese scrap export offers and the expectation of US domestic scrap increasing by $20-30/gt. Pacific northwest mills are expected to increase domestic buying prices in early September requiring competing docks to increase their buying prices.
Several sellers and buyers reported expectations of prices continuing to firm up into next week on continued demand and tight scrap supply flows, making note of the tight scrap situation and continued interest from Vietnam, Bangladesh, and other markets. This despite concerns from Taiwan and South Korea, where some buyers are slowing inquiries due to sufficient scrap inventories, concern over higher prices against stagnant finished steel prices, and uncertainty on global billet prices.
The Davis Indexes in San Francisco also increased with #1 busheling rising by $7/mt to $267/mt fas and HMS 1&2 (80:20) moving up by $9/mt to $247/mt fas. P&S 5ft rose by $7/mt to $266/mt fas and shredded increased by $8/mt to $266/mt fas.
The weekly Davis Indexes in Seattle increased across all grades with #1 busheling rising by $5/mt to $263/mt fas, HMS 1&2 (80:20) climbing by $10/mt to $248/mt fas, and P&S5ft and shredded both increasing by $4/mt to $262/mt fas.