NEW YORK Prices for secondary aluminum alloy were unchanged March 25, with sources indicating that a lack of price movement in both secondary smelter scrap and alloy grades was creating a growing sense of uneasiness for alloy producers and scrap suppliers.
"One of two things has to happen: either alloy prices will go up or scrap prices will go down," one alloy producer source said. "Unfortunately, scrap dealers are reluctant to sell at current prices and alloy makers are having trouble finding buyers who will pay up."
"Scrap is still very tough to source effectively and it seems scrap dealers are laying low, waiting for prices to move up," a second producer source said.
The London Metal Exchanges cash North American special aluminum alloy contract (Nasaac) ended the March 25 official session at $1,795 per tonne (81.4 cents per pound), down 1.4 percent from $1,820 per tonne (82.6 cents per pound) March 21.
A380.1 held steady at $1.04 to $1.05 per pound March 25, with some sellers reporting sales of small loads at $1.06 per pound. Alloy 319.1 was unchanged at $1.09 and $1.10 per pound, while 356.1, A360.1 and A413.1 were steady in a range of $1.11 to $1.12 per pound.
"At this point, I am making money on other products," a third alloy producer source said. "However, it doesnt mean I can simply stop making A380. I still need volume to run the plant and absorb overhead."
"I know that on the primary side guys are hoarding material," one scrap supplier said. "The big firms are still moving metalthey have to do it to keep things runningbut for the most part the industry is taking a wait-and-see attitude."
Meanwhile, prices for most secondary smelters aluminum scrap grades were unchanged March 25, with market participants noting that recent bad weather across much of the Midwest exacerbated an ongoing supply shortage. "As long as snow keeps falling things will get tighter," a scrap trader said. "In-flows have been terrible and peddler obsolete scrap is almost nonexistent."
The only secondary grade that showed movement was used beverage cans (UBCs), which fell to a range of 74 to 76 cents per pound from 75 to 77 cents previously. "Everyone is waiting for the weather to turn," one UBC buyer told AMM. "We should see volumes increase, especially in deposit states, once things get a little warmer."