Aluminum scrap contracts show bullish market going into ’11
Dec 15, 2010 | 10:25 AM
Annual aluminum scrap contracts for 2011 have tied up larger volumes than in previous years, which could put pressure on some grades in the spot market next year, market sources said.
Brokers and major consumers of high-purity scrap said price spreads remain on par with last December's spreads or have tightened slightly.
Formula-based contracts completed this month indicate that mill-grade segregated low-copper alloy clips (5052) have been locked in at highs of 94 percent of the Midwest delivered price of primary aluminum (P1020) on the London Metal Exchange. Most new-production, painted-siding contracts reportedly were at spreads between 27 and 29 cents off the P1020 Midwest price.
Mill-grade, high-purity scrap like painted siding, 5052, 6061, 3003 and extrusion-type material such as 6063 (10-10 material) were most sought after, sources said.
"Formula deals were either level or tighter in some cases. But there was no widening. On painted siding, we signed most contracts in the 26- to 27-cent ballpark for 2011. Prices on 5052 were a penny tighter than last year," a major broker said. "It seems like 94 percent is a good deal to get, but one would have to guarantee six to eight loads a month. Those supplying single loads got contracts at 91 percent."....
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