Pittsburg 05/10/2016 - AMM - By Brad MacAulay
Sluggishness in the secondary aluminium alloy market is curbing some consumers' appetites for smelter-grade scrap despite a reported slowdown in secondary aluminium scrap flows.
“Hopefully, the 380 price will hold this month. Scrap is still on the slow side and there’s not enough to go around on old sheet, old cast and aluminium radiators. The high bidder wins,” one consumer source said. “We’re holding pricing to see if we can add some volume to October scrap requirements.”
“Metal is still tight as we come into the fall, with an expected decline in yard intakes,” a supplier source said.
Some consumers have been attempting to boost inbound flows on certain scrap grades over the past week amid indications of a slowdown in supplies.
Despite reports of slower flows, market participants remain on the sidelines as uncertainty in the secondary aluminium alloy arena continues to hang over the market.
“The ingot price does not support higher scrap prices,” another consumer source said. “We are unchanged on pricing [...] [and] do not need much between now and the end of the year.” He noted that all eyes will be focused on the secondary aluminium ingot market for the remainder of the year.
Smelters have been under immense pressure following gradual declines in secondary aluminium alloy prices amid adequate supply levels, discounted material and signals of softening demand.
Prices for smelter-grade aluminium scrap remain unchanged, along with those for secondary aluminium alloys and mill-grade aluminium scrap, according to Metal Bulletin sister title AMM’s latest assessment.
The London Metal Exchange's three-month aluminium contract closed the official session on October 4 at $1,679 per tonne (76.2 cents per lb), up 1.2% from $1,659.50 per tonne (75.3 cents per lb) a day earlier and 0.9% above $1,663.50 per tonne (75.5 cents per lb) on September 29.
This article was first published by AMM. Metal Bulletin, the global metals and mining price reporting agency that also owns AMM, recently acquired 100 percent of the shares of FastMarkets Ltd.