NEW YORK Producers of deoxidized aluminum have expressed frustration at a decoupling in spot sales prices from scrap purchasing costs, with December business reported to have dropped as low as 94 cents per pound.
Several producers told AMM that they had missed the majority of spot business for December by holding the line on quotes above 95 cents.
"The last of the sales were less than 95 cents. We did not participate in anything less than 99 cents. We took ourselves out of the market," one producer said.
"We finished up in the 96- to 98-cent range, but we did not do a lot of business. ... I felt, as others did, that the market should be up around 98 cents to $1, and I heard that some people sold below 94 cents," a second producer said.
"I think they mostly went for 94 to 95 cents. I missed business, because I was quoting 96 to 97 (cents)," a third producer added. "I think there were a few big guys with access to inventory wanting to make sure they got rid of it."
The second producer said he was frustrated by deox spot prices for December ending slightly lower than November levels (amm.com, Nov. 7), with the price of scrap increasing with recent gains in London Metal Exchange pricing after holding steady for much of November.
"I dont think the LME has any kind of pressure on the deox sales price whatsoever. We see the run-up in the LME push the price of scrap up, and deox doesnt go with it. Theres no rhyme or reason anymore," he said.
Old sheet is currently trading in a range of 71 to 73 cents per pound, well above the 30-cent spread traditionally sought by deox producers.