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

US West Coast dock prices began trending down on Tuesday after remaining mostly rangebound last week. The steepest decline was witnessed in Los Angeles dock prices with smaller drops in Portland and San Francisco this week. 


Export demand had been firming up until last week when docks begin to adjust to updated global cues. Lower iron ore import prices in China and reduced scrap import deals in Turkey set the stage for uncertainty in the Asian buying markets. 


Scrap prices and demand will remain strong in 2021. Still, buyers took a step back and lowered their bids given the uncertainty around China’s environmental policies that are being adjusted according to region, especially in the active manufacturing and steelmaking zones across the country. Feedstock supply improvements on seasonality are also impacting buying choices. The few Chinese import scrap inquiries heard in the market have also been adjusted lower. 


Japanese export scrap prices are under pressure from the drop in bids in the Kansai scrap tender, lower domestic scrap buying prices, and aggressively lower bids by Asian buyers. Japanese scrap export offers have fallen and are placing pressure on US scrap export offers in the containers and bulk markets.


The daily Davis Index for Turkish imports of US-origin HMS 1&2 (80:20) slipped down by $25.58/mt to $430.83/mt on Tuesday from $456.41/mt cfr on Mar 9. Turkish mills continue to lower bids on uncertain short-term steel demand.


Asian buyers from South Korea and Vietnam have also substantially lowered scrap import bids to balance still recovering domestic economies and a sluggish adoption of higher prices by buyers. Buyers are beginning to resist the higher finished steel prices despite the expectation for additional construction projects and recovering economies. 


The weekly Portland Davis Indexes declined for #1 HMS by $8/gt to $362/gt delivered, for P&S 5ft by $7/gt to $374/gt delivered, and for shredder feed by $9/gt to $265/gt delivered. 


In San Francisco, the weekly indexes ticked down for #1 HMS and P&S 5ft by $3/gt to $325/gt delivered and $336/gt delivered, respectively. The shredder feed index declined by $1/gt to $217/gt delivered. 


Los Angeles docks encountered a price fall announcement last week followed by one on Tuesday totaling about $30/gt. Initially, market participants expected a second decline before the end of the month, but it was absorbed much sooner. Thus, the weekly Los Angeles Davis Indexes fell for #1 HMS and P&S 5ft by $26/gt to $267/gt delivered and $291/gt delivered, respectively. The shredder feed index declined $25/gt to $172/gt delivered. 

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