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Mill-grade aluminum scrap prices fall

Keywords: Tags  LME, Nasaac, Comex, mill-grade aluminum, aluminum scrap, A380.1, aluminum, Nathan Laliberte

NEW YORK — Prices for mill-grade aluminum scrap fell April 22 due to a decline in tags on the London Metal Exchange.

Prices for 5052 segregated low-copper alloy clips fell to 88 to 90 cents per pound from 89 to 91 cents, 3105 clips declined to 80 to 82 cents per pound from 81 to 83 cents, mill-grade mixed low-copper alloy clips fell a penny to 78 to 80 cents per pound from 79 to 81 cents and painted siding narrowed to 74 to 76 cents per pound from 75 to 77 cents previously.

But sources indicated that continued tightness in scrap and strong demand has prevented tags from weakening to the same extent as the decline in terminal markets.

"I think mills are going to have to start getting creative with what they buy, because a lot of the grades they use are just not that available," one mill-grade seller said. "There has been a recent push on painted siding from the major mills, largely because it’s a desirable component for their product mixes. With things as tight as they are, I think they are going to have to look for an alternative; maybe a mixture of good mixed low-copper clips and used beverage cans (UBCs)."

The cash primary aluminum contract on the London Metal Exchange ended the official session at $1,841 per tonne (83.5 cents per pound) April 22, down 1.7 percent from $1,874 per tonne (85 cents per pound) April 18. LME aluminum prices regained a little ground April 23, with the cash contract ending the official session at $1,858.50 per tonne (84.3 cents per pound).

Meanwhile, some grades of smelter-grade secondary aluminum prices weakened April 22, as sources said an ongoing supply crimp continued to support most secondary tags.

"I have never seen so much resilience in scrap pricing," one secondary aluminum seller said. "Obviously, it’s an issue of supply and demand at this point."

Painted siding fell a penny to 71 to 73 cents per pound from 72 to 74 cents previously, high grade turnings weakened to 71 to 73 cents per pound from 72 to 74 cents, and mixed-grade turnings declined to 65 to 67 cents per pound from 66 to 68 cents April 18.

Aluminum-copper radiators also fell to $1.65 to $1.70 per pound from $1.67 to $1.72, with sources saying that major declines on Comex were taking a toll on copper-based aluminum scrap grades.

Domestic aluminum producers’ UBC scrap prices eased to 75 to 77 cents per pound from 76 to 78 cents.

Secondary alloy tags held steady for the second consecutive week, with sources telling AMM that despite a weaker scrap market alloy sellers were holding the line on prices.

Most producers put A380.1 sales at $1.04 to $1.05 per pound, as sources said that sales at $1.06 per pound were no longer achievable.

All other major alloys were unchanged, with 319.1 at $1.09 to $1.10 per pound, 356.1 at $1.11 to $1.12, and low-copper A360.1 and A413.1 alloys were steady at $1.09 to $1.11 per pound and $1.10 to $1.11 per pound, respectively.

The LME’s cash North American special aluminum alloy contract (Nasaac) closed the official session at $1,755 per tonne (79.6 cents per pound) April 22, unchanged from the April 18 price. However, the price edged slightly higher April 23, ending the official session at $1,770 per tonne (80.2 cents per pound).

Despite Nasaac’s lack of movement, sources said that large withdrawals of Nasaac metal from LME-listed warehouses have been taking place.

"We are getting reports that inventory levels have seen major declines over the past two weeks," one alloy producer said. "Sure, some of that is standard die caster use, but most of it is probably in reaction to the decline of the contract. Either way, no one is going to put money into Nasaac at the current level."

Nasaac stocks in LME-approved warehouses declined to 132,480 tonnes as of the close of business April 22 from 142,180 tonnes April 5, with the largest withdrawals coming out of stores in Detroit and other deliveries from Chicago, Baltimore and New Orleans warehouses.

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