Secondary aluminum makers face margin squeeze

Nov 18, 2008 | 01:40 PM | Barbara O'Donovan

The secondary aluminum industry is facing some tough times as participants feel the decline in scrap prices is close to an end while ingot prices continue to drop.

"I sense scrap prices have reached a bottom and alloy prices will continue to fall," industry consultant Andy Smith told delegates at last week's 16th International Recycled Aluminium Conference held by AMM sister publication Metal Bulletin.

Scrap prices had been falling at a faster pace than ingot prices, leaving alloy producers a margin on their sales to consumers or deliveries into London Metal Exchange warehouses. But as demand for ingot slumps to new lows amid a lack of orders from the automotive industry, ingot prices will continue to fall, according to market sources.....

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