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

Dock prices in Houston declined by $40-50/gt as the region prepares for the April US domestic scrap buying week. Limited export demand and the domestic economic effects from COVID-19 policies have placed further downward pressure on scrap prices. Domestic prices were expected to decline by $20-30/gt at the end of the early March buying cycle but could now fall by $40-50/gt during the April trading week.


The Davis Indexes in Houston decreased across all grades with the index for HMS 1&2 (80:20) decreasing by $40/gt to $160/gt delivered, while P&S 5ft fell by $50/gt to $185/gt delivered, and shredder feed declined by $18/gt to $115/gt delivered.


In Los Angeles, the Davis Indexes were flat for HMS 1&2 (80:20) at $143/gt delivered and remained unchanged for P&S 5ft at $154/gt delivered. The index for shredder feed decreased by $5/gt to $102/gt delivered. LA dock prices began to decline in January with each month facing incremental base price declines. 


In San Francisco, the Davis Index for HMS 1&2 (80:20) decreased by $16/gt to $167/gt delivered, while it decreased for P&S 5ft by $18/gt to $175/gt delivered. The index for shredder feed decreased by $1/gt to $112/gt delivered. According to market participants, the fluidity of prices is intense and is evaluated frequently. A Bay area supplier stated that given the present market dynamics, prices are sliding and that selling is priority, which may lead prices to hit $100nt on HMS 1&2 (80:20) soon.


In Portland, the Davis Index for HMS 1&2 (80:20) remains at $201/gt delivered, while the index for P&S 5ft was flat at $213/gt delivered. The index for shredder feed held at $133/gt delivered. The indexes in Portland could decline substantially over the week as regional domestic mills negotiate April scrap buys amid the fall in domestic prices.


Sales of bulk scrap as well as containers off the West coast are limited at present. Bulk buys were expected to be preferred by large Asian buyers because of the challenge in obtaining containers. Unfortunately, scrap demand remains limited in the short term due to the net reverberating effects from the COVID-19 pandemic policies, temporary closure of mills across the world, and suspension of activity at automotive plants and construction sites. 


The situation is further compounded for West Coast scrap sellers as Asian mills find closer alternative sources to US scrap such as attractively priced Japanese scrap and South Korean billet. Market participants have expressed concern about reaching a “no-price zone as experienced in 2008.”

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