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Mill-grade aluminum scrap prices fall

Keywords: Tags  aluminum scrap, mill grades, LME, Nasaac, Comex, aluminum, scrap, 5052 3105

NEW YORK - Mill-grade aluminum scrap prices eased Feb. 21 on the back of diminished volumes and weaker primary prices on the London Metal Exchange, sources told AMM.

Prices for 5052 segregated low copper alloy clips fell to 96 to 98 cents per pound from 97 to 99 cents Feb. 19, while 3105 clips tightened to 87 to 88 cents per pound from 87 to 89 cents.

Mill-grade mixed lower copper alloy clips also narrowed to 84 to 85 cents per pound from 84 to 86 cents, while painted siding fell to 78 to 80 cents from 80 to 81 cents.

The decrease in aluminum prices on the London Metal Exchange was primarily behind the decrease in mill-grade prices, according to buyers and sellers.

The cash primary aluminum contract on the LME ended the official session at $2,047 per tonne (92.9 cents per pound) Feb. 21, down 0.9 percent from $2,065.50 per tonne (93.7 cents pound) a day earlier and 1.4 percent below the Feb. 19 level of $2,075.5 per tonne (94.1 cents per pound).

Despite the decline in prices buyers still maintain that supply is thin on the ground.

“Things are still tight. We are also seeing demand, which usually picks up in the first quarter,” one mill-grade buyer said. “When the market becomes range-bound like it is now, sellers will wait for the price to go up before they make a move.”

“Anyone with deep pockets will make a mountain and hold,” a second mill-grade buyer said.

Meanwhile, prices for some secondary aluminum alloy grades increased Feb. 21, sources said.

Prices for 319.1 rose a cent to $1.10 to $1.11 per pound from $1.09 to $1.10 previously. A360.1 tightened by a penny to $1.10 to $1.11 per pound from $1.09 to $1.11 per pound Feb. 19, while A413.1 increased to $1.11 to $1.12 per pound from $1.10 to $1.12.

The LME’s cash North American special alloy contract (Nasaac) was flat for the third consecutive day, ending the official session at $1,920 per tonne (87.1 cents per pound) Feb. 21.

Prices for A380.1 followed Nasaac’s trend and remained unchanged at $1.04 to $1.06 per pound Feb. 21, although some producers said that margins continue to be squeezed to such a extent that production cutbacks could be warranted (, Feb. 20). 

The gains in alloy prices are not enough given the cost of scrap, producers told AMM.

“We’re getting squeezed by scrap dealers, and we’re still working on negative margins,” one secondary alloy producer said. “Thankfully, prices have been moving up over the last couple of weeks in spite of the LME’s drop.”

Prices for secondary smelters’ grades were largely unchanged Feb. 21, with market participants noting steady volumes and strong demand.

The only secondary grade that strengthened Feb. 21 was nonferrous auto shred (twitch), which rose a penny to 83 to 85 cents per pound from 83 to 84 cents previously. All other scrap grades were unchanged.

Reacting to a weeklong decline in Comex copper prices, aluminum copper radiators tags dropped two cents to $1.78 to $1.83 per pound from $1.80 to $1.85 Feb. 19.

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