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

Export yard ferrous scrap prices on the West Coast began declining in tandem with the East Coast as import prices softened on buyer resistance. Dock prices in San Francisco and Los Angles declined while Portland trended mostly flat for heavy melt and structural steel. 


The Turkish scrap import index for US-origin HMS 1&2 (80:20) declined by $32.50/mt to $450/mt cfr on Tuesday from $482.50/mt cfr on Jan 12. The anticipated correction on slipping Turkish domestic scrap prices and against firm offer prices began to inform the global scrap market this week. Additionally, Asian buyers are contending with either weaker than expected finished steel demand, or a push back from buyers unwilling to absorb higher prices on higher input costs. 


Imported scrap offers and deals into India have declined as sellers have refused to match offers to bids and buyers await further price clarity. Indian domestic ferrous scrap has adjusted downward on weaker finished steel demand and discounted deal prices. China is also supporting the downward scrap trend as steel prices and domestic scrap buying prices may remain under pressure into mid-February due to the Chinese New Year holiday.


Domestic scrap prices and lower billet rates in Bangladesh pushed imported scrap prices down with limited trades. While strong steel demand will continue in the emerging market, buyers are requesting discounts due to the softening global price cues. 


In Taiwan, South Korea, and Vietnam, importers of US and Japanese scrap, are facing weak steel demand and lower domestic scrap prices, and may reduce finished steel prices over the next few weeks. Domestic scrap prices in Thailand, Malaysia, and Pakistan are also placing downward pressure on imported scrap deals. 


Market participants in the US Pacific Northwest noted that while the market has peaked, the regional docks have not yet adjusted pricing and may delay it until late January or early February. Shredder feed for internal processing was in demand over the past two weeks with the possibility of slightly higher prices into late January, but they rose only over the past week and are likely to decline into February. Scrap dealers expect a drop of $10-20/gt at the docks in early February on present market conditions.


In Portland, the weekly Davis Indexes for #1 HMS and P&S 5ft remained unchanged at $373/mt delivered and $385/gt delivered, respectively. Shredder feed increased by $11/gt to $294/gt delivered. Docks in the region compete against mills and given the expected strong demand in February have opted to maintain prices flat for the moment. 


The San Francisco Davis Indexes declined after two consecutive weeks of increases in January. The index for #1 HMS fell by $21/gt to $346/gt delivered, P&S 5ft dropped by $20/gt to $357/gt delivered, and shredder feed decreased by $24/gt to $233/gt delivered. Market participants reported disparity in buying prices. For some, no changes were evident on larger volumes while others reported that their prices were adjusting downward rapidly.


The weekly Davis Indexes for dock prices in Los Angeles also declined early in the week and several sellers expect docks to announce another price reduction at the end of the week or early next week. The weekly index for #1 HMS declined by $20/gt to $290/gt delivered, P&S 5ft fell by $20/gt to $301/gt delivered, and shredder feed slipped by $18/gt to $206/gt delivered. Los Angeles dock buying prices declined on both lower bulk deal pricing expectations and declining container deals. 


Containerized prices in Los Angeles moderated from $405-425/mt fas in late December to around $410-420/mt fas for HMS 1&2 (80:20) last week but have encountered further declines this week with market participants reporting wide drops of up to $25-50/mt fas in ongoing negotiations against last week’s settled range. The most common containerized price indicator at the moment is $385/mt fas on HMS 1&2 (80:20), down $25-35/mt against the range last week.

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