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

US West Coast ferrous scrap dock prices rose on strong export demand and tight scrap inventories. Portland and San Francisco encountered substantial price increases. Los Angeles docks have yet to announce an official price rise but dealers are paying more in quiet deals to attract tonnage. 


Turkish imported scrap prices that have now reached $305/mt cfr on HMS 1&2 (80:20), up $18/mt from an Oct 13 deal, are supporting a strong global scrap pricing sentiment for the remainder of the year. Market participants believe that bulk and container prices could trend sideways for the remainder of the year after rising for another week or two. The trend is attributed to buyer resistance to higher prices along with year-end inventory planning and realignment by buying companies due to the uncertainty in their own domestic markets.


Limited deals are being heard at higher prices this week, especially in bulk, although the shortage of ferrous scrap and high capacity utilization at mills may buoy activity. 


South Korean domestic scrap prices increased amid rising imported scrap offers and expectations of more production of semi-finished and finished steel in December. As raw materials cost increases, mills are being pressured into raising finished steel prices. Given the still developing recovery post-COVID and fears of a second wave that would slow down economies, mills are uncertain about the market’s strength in Q1 2021. 


Bangladesh and Thailand are facing the headwind of slow domestic demand. On the other hand, Malaysian mills prefer paying higher domestic scrap prices instead of scrap imports due to economic uncertainty and a depreciating currency. India’s demand will continue to remain strong after the short-term slowdown due to the Diwali festival that begins on Nov 13.


Export scrap prices in Japan, Russia, UAE, EU, and Latin America are firming up on active demand from Asian buyers. US scrap exporters are holding firm pricing on tight scrap flows and inventories along with expectations of local scrap price increases in December and January.


Mexican mills are also expected to continue seeking tonnage throughout the West Coast, Southwest, and Southern US regions due to increased production schedules that have returned to pre-pandemic utilization rates in some cases. 


The weekly Davis Indexes in Portland rose after two consecutive flat weeks with HMS 1&2 (80:20) increasing by $16/gt to $234/gt, P&S 5ft climbing by $10/gt to $249/gt, and Shredder feed rising by $2/gt to $188/gt.  


In San Francisco, the weekly indexes also jumped after two quiet weeks with HMS 1&2 (80:20) increasing by $27/gt to $261/gt delivered, P&S 5ft climbing by $20/gt to $266/gt delivered, and Shredder feed rising by $19/gt to $174/gt delivered.  


The weekly Davis Indexes in Los Angeles increased over the week following an unchanged week as docks sought to attract tonnage. The indexes rose for HMS 1&2 (80:20) by $5/gt to $196/gt delivered, P&S 5ft increased by $3/gt to $207/gt delivered dockside, and Shredder feed increased by $8/gt to $147/gt delivered.


In Los Angeles, the containerized market strengthened over the past week as HMS 1&2 (80:20) prices increased from $265/mt fas last Thursday to transactions now being heard up $5-10/mt to $270-275/mt fas on Tuesday.

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