UK secondary aluminium ingot prices fell on Wednesday April 25, as export markets remain closed due to unfavourable exchange rates and a shortage of containers for eastbound shipping.
“Whichever part of the market you are in, with the euro at 1.22 [to the pound sterling] and the dollar at 1.61, the export markets are not good for ingot or scrap,” an ingot producer said.
LM24 pressure diecasting ingot
fell to £1,440-1,500 ($2,323-2,420) per tonne from £1,470-1,520 previously, while LM6/LM25 gravity diecasting ingot
slipped to £1,750-1,800 per tonne from £1,760-1,810.
“Ingot has clung on long enough to higher prices and there have been some adjustments,” the producer said. “There is good demand, but the UK market is oversupplied at the moment.”
Demand from UK consumers remains good, but with the export markets shut there is far more material, both scrap and ingot, now available in the UK than the market can absorb.
“The export market is not pleasant – it got quite tough and quite depressing quite fast,” a scrap dealer said.
Scrap prices also fell on Wednesday, due to fewer exports and also the continuing weakness in London Metal Exchange aluminium prices.
Three-month aluminium on the LME settled at $2,054/054.5 per tonne on Monday April 23, from its peak the previous week of $2,087/088.
“It continues to affect the pure grades and also hits sentiment on the commercial grades,” the scrap dealer said.
Commercial pure cuttings
fell to £1,000-1,050 per tonne from £1,010-1,070 previously, while clean HE9 extrusions
slipped to £1,120-1,180 per tonne from £1,140-1,190.
In the commercial grades, loose old rolled cuttings
fell to £830-850 per tonne from £850-880; baled old rolled cuttings
traded at £900-950 per tonne from £930-980; cast wheels
dipped to £1,170-1,230 per tonne from £1,190-1,250; and commercial turnings
fell to £690-750 per tonne from £700-760.
“Demand for ingot has fallen because the producers are not able to export so much. They’ve been squeezed more, and as scrap traders we get squeezed as they do,” the scrap dealer said.
Traditionally, scrap sellers have been able to resist lower prices from falling ingot prices for a short time at least, but with export markets closed scrap dealers have to accept lower prices from UK buyers more promptly.
“Whether you are a producer, a trader or a consumer [of scrap], margins are very thin,” the producer said. “Everyone realises the pressure is on and prices may weaken further going forward.”