Aluminum scrap up on P1020 premium spike
Jan 22, 2014 | 04:51 PM
| Nathan Laliberte
NEW YORK Recent spikes in U.S. Midwest aluminum premiums have thrown the secondary aluminum market into chaos, traders said, with premiums continuing to rise despite steadily weakening exchange prices.
AMMs spot P1020 premium surged to 20.5 to 21 cents per pound Jan. 22.
Several sources noted that prices for grades of scrap capable of making mill or extruded fabricated products were being highly impacted by the recent premium jump, largely because of a shortage of material caused by aggressive purchasing from primary and secondary buyers. And with a recent increase in the overall price of P1020, factoring in the Midwest premium, manufacturers of fabricated products are consistently outbidding secondary producers, sources told AMM. "Given that Alcoa (Inc.) and Novelis (Inc.) have handed the premium increase to scrap dealers, mill scrap has increased quite a bit and is now largely out of the reach of secondaries," one scrap buyer said. "Therefore, demand on the residual secondary scrap is even stronger, which will likely increase prices and also....
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