NEW YORK Prices for deoxidized aluminum rose slightly in March, but manufacturers are still struggling to turn a profit at current levels, market participants said.
Most producers logged sales in a range of $1 to $1.01 per pound in March, up a penny on the low end from February, and some sources told AMM that they were still waiting for prices to increase before they enter the market.
"We were selling at about $1.01 in March. ... A lot of quotes came in, but we didnt do a whole lot of business. We really need be in the $1.03 to $1.04 range to make any money," one deox producer said.
"To the disappointment of everyone, discounting seemed to prevail this month," a second producer said. "Its a very competitive market right now. Even though most sales were in the $1 range, people know that we cant make money at anything below $1.03."
Other sources noted that weakening terminal markets should eventually bring scrap prices down, which will lower deox production costs.
"Volumes are fine, and it doesnt make sense why people are discounting," a third producer said, noting that he had heard scrap was falling but had yet to receive lower quotes from dealers.
"April should be an interesting month," a fourth producer said. "If the (London Metal Exchange) continues to slip away, it will definitely have an effect on scrap prices."