NEW YORK Free-market aluminum scrap and alloy prices dropped almost across the board Monday as the London Metal Exchange alloy contract held below the symbolic $2,000-per-tonne mark.
Old sheet was one of the few unchanged items at 72 to 74 cents per pound, with old cast dropping to between 75 and 77 cents per pound from between 76 and 78 cents per pound Thursday, and used beverage cans dropping to between 72 and 74 cents per pound f.o.b. shipping point from between 74 and 76 cents per pound previously.
A380.1 prices also dropped to between $1.06 and $1.07 per pound from between $1.07 and $1.08 per pound Thursday, with producers saying that $1.08 has effectively become a "quote price."
Traders cited the LMEs recent decline as the main factor in the scrap price correction. The LMEs North American special aluminum alloy contract (Nasaac) cash price closed the official session at $1,977 per tonne (89.7 cents) Tuesday, down 1.2 percent from $2,000 per tonne (90.7 cents per pound) Friday.
"The LME is still softening up; thats going to keep driving prices down," one alloy producer said.
"Our fortunes are in the hands of Europe," a second alloy producer said.
With alloy prices falling in line with scrap price drops, alloy producers said they are continuing to feel pressure on their margins.
"The margins are still really squeezed; with the current scrap market, A380.1 should be $1.09 per pound," a third alloy producer said.
Increased scrap flows, however, are expected to relieve some of that pressure in the coming months.
"I think as we get closer to the summer months, itll loosen up. Some of the auto plants will start shutting down, so there wont be as much pressure to push for scrap," the first alloy producer said.
"Scrap is becoming a little more available," the second producer agreed. Scrap prices "didnt go down as quickly as ingot did, but theyre starting to."