NEW YORK Scrap aluminum wheel prices may increase moving into September as the automotive industry begins to ramp up inventories for the 356.1 alloy, with spot prices currently holding firm.
Traders continued to put the price of scrap wheels at 86 to 88 cents per pound Friday, still well above the London Metal Exchanges closing aluminum cash price of $1,835 per tonne (83.2 cents per pound).
Sellers have simply "gotten used to higher numbers," one consumer said. "I think theres enough (supply) there, its just that people want bigger numbers. We were in the low 90s and then the market moved down 5 or 6 cents, but its not something that everyone wants to do."
One broker said the material is in such consistently strong demand that it is no longer subject to LME fluctuations. "The LME moves up a nickel and the wheels price stays the same; the LME moves down a nickel and the wheels price stays the same," he said.
The broker added that prices likely will rise in September as automotive companies begin to take stock for 2013 model production. "People are holding sales. Theyre assuming auto is going to kick off in September and prices should go higher," he said.