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

The US West Coast ferrous scrap dock prices climbed throughout the West Coast supported by a leap in US domestic scrap prices and continued demand from Asian countries. The limited availability of containerized scrap availability is also prompting buyers to consider bulk vessel prices. Bulk shredded buys are expected to breach $400/mt cfr to Asian destinations. 


Tight scrap inventories and flows continue throughout the West Coast. Moreover, domestic mills in the Southwest to Texas region are also drawing inventories. Mexican mills are also actively pursuing scrap purchases throughout California and the Southwest. 


Los Angeles docks began to roll out official price increases of $10/gt last week and followed those up with another $20/gt increase during the week. Effective deal prices have therefore increased substantially as entities compete for scrap flows. In Oregon, docks continued adjusting in early December with frequent $5-10/gt increases as domestic mills raised prices to compete for scrap. 


Scrap deals at $370-375/mt cfr Turkey are increasing expectations that US-sourced import deals will be $80/mt higher than a US deal in early November. The higher Turkish deals are reverberating throughout the global scrap market with export prices in the US, Japan, Russia, and Latin America firming up. US domestic scrap increased by $70-85/gt consistently throughout most regions on secondary grades during the recent early December trading period. Thus, higher domestic mill prices have forced docks to increase their rates as well. 


Taiwan, South Korea, Vietnam, and Japan are facing higher domestic scrap prices. Tokyo Steel has increased domestic scrap prices four times already in December to support higher export scrap prices as domestic mills compete to retain volumes. Higher Japanese export tags, an alternative source to US scrap, continue to support elevated prices in the US export market. 


Domestic scrap prices in Malaysia and Thailand are also rising amid climbing imported scrap tags. Indian buyers have shifted to sourcing scrap locally due to rising import scrap offers, but with competing local needs they may return to the import market on increased production rates.


The weekly Davis Indexes in Portland leaped as US domestic mills competed for inventories with docks. The index for #1 HMS increased by $21/gt to $286/gt delivered and P&S 5ft climbed by $19/gt to $297/gt delivered. The index for shredder feed rose by $12/gt to $226/gt delivered.  


The San Francisco Davis Indexes increased aggressively through November and this week HMS #1 rose by $7/gt to $289/gt delivered and P&S 5ft jumped by $12/gt to $300/gt delivered. The index for shredder feed rose by $18/gt to $200/gt delivered. 


The Davis Indexes in Los Angeles increased by $19/gt for #1 HMS to $237/gt delivered, P&S 5ft climbed by $22/gt to $252/gt delivered, and shredder feed rose by $3/gt to $172/gt delivered. Prepared grades were sought after due to limited scrap availability. 


The Los Angeles containerized market has continued its upward trend for the ninth consecutive week wherein #1 HMS has increased by $5-10/mt to $305-310/mt fas this week against $300/mt fas last week. These prices are higher than the early November Davis Index increases of $38-43/mt for the grade. Containers are in short supply and COVID-19 slowdowns due to California stay-at-home policies can result in a negative effect on scrap flows from larger manufacturers.

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