NEW YORK Domestic prices
for secondary aluminum alloys remain unchanged even as the
London Metal Exchanges cash North American special
aluminum alloy contract (Nasaac) plummeted March 11 to its
lowest level since June 2010, validating a growing number of
producers recent decision to delink their alloy sales
prices from the published Nasaac price, sources said.
"The drop on Nasaac just goes to
show that its no longer a viable contract for hedging," a
source at one alloy producer said. "Its supposed to be
based on supply and demand, but instead has become a trading
tool for finance firms. If I were a betting man, I would put
money on Nasaac going up for no other reason than traders are
going to be jumping in looking for quick profits."
The cash Nasaac price ended the
official session March 11 at $1,781 per tonne (80.8 cents per
pound), down 3.4 percent from $1,845 per tonne (83.7 cents per
pound) at the end of last week, marking a return to lows last
logged some two and a half years ago. Prices recovered slightly
March 12, inching up to $1,810.50 per tonne (82.1 cents per
pound) but still well below recent highs above $2,000 per tonne
(90.7 cents per pound).
Meanwhile, secondary aluminum
alloy prices in the physical market saw no parallel
A380.1 held steady at $1.04 to
$1.06 per pound March 11, although some sellers claimed to have
made small-load sales in the $1.06- to
$1.07-per-pound range. Alloy 319.1 was unchanged at the start
of the week at between $1.09 and $1.11 per pound, 356.1 was
steady in a range of $1.11 to $1.12 per pound, A360.1 remained
at between $1.10 and $1.11 per pound and A413.1 stayed at $1.10
to $1.11 per pound.
"Scrap prices are not moving
down and I am selling pretty good volumes right now," a second
alloy producer source said. "I dont see my price moving
down in the near future."
The growing disparity between
some exchange prices and actual alloy sales prices has been an
issue for some time, sources said, with aluminum alloy major
Aleris International Inc. announcing in October plans to start
pricing its products based on scrap input costs rather than off
Nasaac-based formulas (amm.com, Oct. 9).
"Real-life supply and demand
figures" and exchange prices are no longer matching up, the
first producer source said this week.
Meanwhile, some mill-grade
aluminum scrap prices eased slightly March 11 on the back of
lower volumes and weakening exchange prices.
Prices for 5052 segregated
low-copper alloy clips fell to 90 to 92 cents per pound from 91
to 93 cents on March 7, while painted siding dipped to 74 to 76
cents per pound from 75 to 77 cents. But 3105 clips held steady
at 82 to 84 cents per pound and mixed lower-copper alloy clips
remained in a range of 80 to 82 cents per pound.
"A lot a people are on the
fence, looking at flows, and beginning to sell into the
market," a mill-grade scrap buyer said. "Despite that, material
is still not readily available."
The LMEs primary aluminum
cash contract ended the official session March 11 at $1,895.50
per tonne (86.0 cents per pound), down 1.6 percent from $1,927
per tonne (87.4 cents pound) at the end of last week.
Despite the decline in exchange
prices, buyers maintained that secondary aluminum tags continue
to be buoyed by an ongoing supply crimp.
"Supply is not good and
its really tough to find good material," another
mill-grade scrap buyer said. "The weather is really starting to
affect things. Hopefully, as spring rolls around well see
things loosen up."
Meanwhile, prices for secondary
smelters scrap grades were largely unchanged March 11 as
sources noted steady volumes and strong demand.
The only secondary grade that
showed movement was used beverage cans (UBCs), which tightened
to a range of 75 to 76 cents per pound from 75 to 77 cents
previously. All other secondary scrap grades were