Secondary aluminum alloy prices could gain some ground if
terminal markets continue to strengthen as demand for alloy
remains healthy, according to market participants.
prices were unchanged July 1 compared with transactions
recorded late last week, but several alloy makers said offers
had already improved.
Most offer prices for
A380.1 were reported at $1.03 to $1.05 per pound, with two
sources noting small-volume sales at $1.03 per pound. For the
most part, A380.1 continued to trade at $1.01 to $1.02 per
pound July 1, according to buyers and sellers, with the latter
pushing to raise prices.
"There seems to be a
bounce in the market. We moved a truckload of 380 at $1.03. The
jump in the London Metal Exchange ... should help also," one
The three-month North
American special aluminum alloy contract (Nasaac) settled July
2 at $1,905 per tonne (86.4 cents per pound), up 1.3 percent
from $1,880 per tonne (85.3 cents per pound) June 27.
"Demand has been very
strong. In fact, we are working the July 4 holiday. Certainly
automotive is strong and scrap has been getting tighter, which
drives prices up. I dont think (scrap) flow is very good.
Even our own yards have slower flows currently," a second
Demand remains fair,
with most consumers still following a just-in-time model, where
"everyone waits until the last minute," one alloy trader said.
"This happens when consumers feel the market will go down.
Hence, we try to keep inventories low but cannot. You will see
someone run out of something in July."
The market should
improve in the next two to five weeks following the holidays
and planned shutdowns, he said. "Shipments will improve as long
as the economy does not falter. We do not need a booming
economy. Just keep growing. Next thing you know:
Alloy prices should
already be higher, a source at a third producer said,
expressing dismay at the current transaction ranges.
380 at $1.04. Volumes are still very strong and shipments in
July will be just about the best ever. The Nasaac has been
moving upward over the last month or so and I believe
were entitled to move upward also," he said.
The third producer
source said Nasaac will continue to influence the market.
"What would you say
influences the price then? Supply and demand? Traders with no
overhead selling under the market? Just who sets the price
anyway?" he asked.
"(It) seems as though
the most willing to sell are the operations that need to pick
away at the business that is usually supported by someone at a
higher price. Those of us that are selling a package and get
some value for their product are constantly battling the gnats.
Human nature. Its pretty sad when we have to try to
justify why were able to sell at a price a little higher
than lower-level traders or operations that dont have the
infrastructure that better mainstream smelters have," he said.
"Am I trying to support pricing at a higher level than most?
Darn right I am. Last time I checked, I believe its OK to
be profitable and make sure the ownership gets a return on
A seller for a fourth
producer that sells most of its alloy on contract deals said he
would quote A380.1 at $1.05 per pound and 319.1 at $1.12 per
pound despite the market trading a few cents below that
"The lower prices are
not justified given where scrap prices are," he said.
scrap prices were unchanged July 1 despite a slight uptick in
primary aluminum prices, while those for prime scrap and used
beverage containers that are typically priced directly as a
percentage of or dollar spread to LME levels strengthened by a
penny in direct correlation to the LME uptick.