Search Copying and distributing are prohibited without permission of the publisher
Email a friend
  • To include more than one recipient, please separate each email address with a semi-colon ';', to a maximum of 5

  • By submitting this article to a friend we reserve the right to contact them regarding AMM subscriptions. Please ensure you have their consent before giving us their details.

Can optimism builds, but prices will remain a challenge


The end of 2010 and the start of the New Year offer some challenges for those seeking to analyze and predict where prices and demand might be heading for aluminum and steel scrap destined to enter the can production stream.

Aluminum scrap tags were basically flat at the start of the fourth quarter as many buyers held out for a clearer view on demand for the next few months. Since scrap flow traditionally slows at year-end, buyers must decide between speculating or awaiting solid information on upcoming demand.

The same was true on the steel side, where scrap prices rose slightly in November due to a buying spree by Turkey. Because the increase didn't reflect any improvement in domestic mill consumption, analysts are unsure how demand will start in the New Year.

Although secondary aluminum smelters are seeing scrap prices tick higher, those changes are more reflective of London Metal Exchange activity than any real change in demand, the Institute of Scrap Recycling Industries said in a fall report. "Consequently, smelters insist that they are not chasing this market but prices are firmer," it said.

Longer term, the demand outlook might be improving, many traders said. Manufacturing in the Midwest grew in the third quarter as claims for unemployment benefits fell and consumer spending showed some sign of recovery. Still, some offered a cautious read.

"The recovery has been uneven across regions. The Midwest might have been better at one point of the year and the Northeast at another point. Some regions were slightly tighter on supply earlier this year and are doing slightly better now," said Leslie Shuman, director of strategy and supply chain at Alcoa North American Rolled Products, part of Pittsburgh-based Alcoa Inc.

Yet there are signs of optimism for growing markets. Crown Holdings Inc., Philadelphia, announced in the fall that it is expanding its beverage can production capacity in Turkey by building a new manufacturing plant in the Osmaniye region in south-central Turkey vs. an existing two-line facility in Izmit, adding about 1 billion two-piece aluminum cans per year to its current annual Turkish output capacity of around 1.5 billion beverage cans.

Have your say
  • All comments are subject to editorial review.
    All fields are compulsory.