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Aluminum alloy tags up; better margins sought

Keywords: Tags  aluminum scrap, aluminum, scrap, A380.1, A360, 356.1, 5052 segregated low-copper alloy clips, London Metal Exchange UBCs

NEW YORK — Free-market aluminum alloy prices rose Feb. 14, with some producers indicating that a supply crimp was looming if margins don’t improve.

"We are no longer going to produce alloy that doesn’t make money for us," one producer of A380.1 said. "There is no reason to produce for the auto industry if there is no margin. Ultimately, you will see the big boys shut furnaces down. People are not going to produce and lose money."

A380.1, which is used primarily in automotive production, rose to a price range of $1.04 to $1.06 per pound Feb. 14, up a penny from $1.04 to $1.05 Feb. 11.

"We have suffered through five months of losses knowing things will turn around," an A380.1 seller said. "Now is the time to finally put our foot down. Smelters need to have some resolve. The big automakers will figure out how to make it work."

Prices for 356.1 also rose to a range of $1.11 to $1.12 per pound from $1.10 to $1.11 Feb 11. A360.1 increased to $1.09 to $1.11 per pound from $1.08 to $1.10, while A413.1 rose to $1.10 to $1.12 per pound from $1.09 to $1.10.

Meanwhile, mill-grade aluminum scrap prices continued to climb, sources told AMM.

Prices for 5052 segregated low copper alloy clips rose to a range of 98 cents to $1 per pound from 97 to 99 cents Feb. 11, while 3105 clips rose to 88 to 90 cents per pound from 86 to 88 cents in the same comparison.

Mill-grade mixed low copper alloy clips also strengthened to 85 to 87 cents per pound from 84 to 86 cents Feb. 11, while painted siding rose by 1 cent to 80 to 82 cents per pound from 79 to 81 cents.

The cash primary aluminum contract on the London Metal Exchange ended the official session at $2,123 per tonne (96.3 cents pound) Feb. 15, up 2.3 percent from $2,076 per tonne (94.2 cents per pound) Feb. 11.

In step with terminal markets and some tightness in supply, prices for some secondary aluminum grades increased Feb. 14, according to market participants.

Mixed high zinc clips rose to 70 to 72 cents per pound from 69 to 71 cents, while the range on secondary smelters’ mixed clips grew by a penny to 75 to 77 cents from 74 to 76 cents Feb. 11.

Aluminum copper radiators strengthened by 1 cent to $1.80 to $1.85 per pound from $1.79 to $1.84 previously.

The range on used beverage cans (UBCs) widened to 80 to 82 cents per pound from 79 to 80 cents.

"Everyone seems to be chasing scrap right now," an aluminum scrap buyer said. "Supply is still very tight. If it continues, prices are only going to go up."

All other scrap grades were unchanged.

The cash North American special aluminum alloy contract was at $1,960 per tonne (88.9 cents per pound) in the LME’s official session Feb. 15, up from $1,905.50 per tonne (86.4 cents per pound) Feb. 11.

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