NEW YORK Producers of secondary aluminum alloys are
preparing for production cutbacks, namely for spot A380.1
material, as shrinking margins and high scrap prices continue
to create unfavorable conditions, sources say.
We are no longer selling as much 380 as we used to,
largely because of tight margins, one alloy producer
said. Instead of selling at an unfavorable price, we
simply wont sell it. Were hoping that scrap will
come off slightly once the weather turns a little warmer and
supplies come back. At this point, we are focusing on other
alloys that will make us money. I know other producers are
taking a similar route.
As the market has come in, we have been holding our 380
price at $1.06 (per pound) firmwhich basically means we
are not selling anything, a second alloy producer said.
I have no idea how people are selling at $1.04 (per
pound) and making any money. They are probably just fulfilling
contracts, maintaining relationships, knowing they will lose
One supplier said he plans to hold his existing A380.1 supply
until prices increase. If we get our number, we get it.
If not, we will wait, he said. Its definitely
frustrating to see terminal markets weaken and scrap prices
remain high. There is nothing we can do at this point.
The London Metal Exchanges cash North American special
aluminum alloy contract (Nasaac) recovered to $1,820 per tonne
(82.5 cents per pound) in the LMEs official session March
21, up 2.2 percent from $1,780 per tonne (80.7 cents per pound)
March 18. The Nasaac dipped slightly March 22,
closing at $1,800 per tonne (81.7 cents per pound).
In step with Nasaacs upward movement, some
secondary alloy prices rose March 21. Prices for A360.1 moved
up a penny to $1.11 to $1.12 per pound from $1.10 to $1.11 per
pound March 18, and A413.1 tightened to $1.11 to $1.12 per
pound from $1.10 to $1.12 per pound previously. A380.1 prices
were unchanged at $1.04 to $1.05 per pound.
Meanwhile, prices for all secondary smelters aluminum
scrap grades were unchanged March 21, as sources said tepid
market activity was creating uneasiness.
Sellers dont want to sell and consumers arent
returning phone calls, one scrap trader said. It
seems to be a rather odd environment right now. Hopefully
things start to move a little next week.
All other secondary grades were unchanged.