Deoxidized aluminum prices have declined over the past month as
producers agreed to lower numbers in a bid to maintain order
Some sales reportedly
fell to as low as 91.5 cents per pound at the end of August
from a range of around 94 to 97 cents per pound in the first
half of August.
Producers said a move
by steel producer ArcelorMittal USA LLC to purchase deox via
online auctions contributed to numbers falling in late
"ArcelorMittal has run
an e-auction for a portion of our deox requirements and the
company will maintain flexibility in its procurement approach
for the material moving forward," an ArcelorMittal
representative told AMM in an e-mail Sept. 3.
One seller said he saw
auction prices for deox fluctuate as much as 5 cents per pound
"The only people
benefiting from these types of auctions are the steel mills,"
A second seller said
auctions tend to produce intense pricing competition and
undercutting, noting that price transparency can inspire
sellers to rapidly adjust price quotes in line with lower
format signals a new phase for deox producers. Some have said
they will leave the market until pricing returns to more
favorable levels and will avoid auctions all together. "Those
kinds of numbers93 to 95 cents per poundare dead
losses in a market like this," a third seller said. "It just
A fourth seller said
auctions are only beneficial for steel mills when there is
extra production capacity in the spot market. He said that
without this extra production, the auction format can hurt
mills in need of immediate delivery.
Deox prices have been
weakening since April amid increased competition and weaker
amm.com, May 3).