NEW YORK — Aluminum alloy producers are continuing to come under pressure from tightening margins, with free-market scrap prices holding firm while A380.1 tags continue to weaken.

Old sheet prices were unchanged at 73 to 75 cents per pound and old cast remained at 75 to 77 cents, while the range for A380.1 narrowed to $1.08 to $1.09 per pound on Thursday from $1.08 to $1.10 on Monday.

The London Metal Exchange’s North American special aluminum alloy contract (Nasaac) cash price closed Friday’s official session at $2,056 per tonne (93.3 cents per pound), unchanged from the previous day.

Alloy producers told AMM Thursday that there were no longer any A380.1 transactions at $1.10 per pound.

"There are some smelters holding out for that based on difficulty matching scrap to $1.08 to $1.09 ingot. They would rather miss the business unless they can at least get $1.10," one broker said.

The narrowing spread between scrap prices and ingot prices has become a source of concern for alloy producers, with tight scrap flows holding those prices firm while ingot prices follow the downward trend of the LME (AMM, April 9).

"Scrap is still crazy tight and way too expensive in relation to the LME," an aluminum alloy producer said.

A second producer, who continues to quote A380.1 at $1.13 per pound, said, "To have any chance to make a margin, $1.13 is the minimum. Selling for lower doesn’t make sense based on where scrap prices are today. It’s still very tight and expensive."

"Something has to give," a second broker said. "Either smelters are going to get the prices up, or scrap has to get cheaper."