secondary aluminum producers are preparing for a difficult
scrap market in 2014, with tightness expected across
international markets and no expectations of lower prices to
"Scrap will be an
issue next year. Were trying to maintain sensible stock
levels until the new year, but when we come back (after the
holidays) it will be tight," one producer said. "At the moment
I can buy what I want, but if I try and push prices down I
dont get it."
While some material is
hidden from the market by dealers that are holding it back in
anticipation of higher prices to come, it isnt enough to
cover the expected shortfall across global markets next
"I went to 13 yards
yesterday and 40 last week, and Im only just scraping
together the tonnages I need," one scrap dealer told
AMM sister publication Metal Bulletin. "I
have inquiries from Europe, but I cant offer anything.
There is not 1,000 tonnes available anywhere."
Inquiries from Europe
for scrap and ingot rose this week after some relief on
exchange rates, which had rendered European prices
uncompetitive over the past several weeks.
"The euro has been a
big help this week, and there are now tonnages going into
Europe on the back of that exchange-rate move," a second
"We sold a 25-tonne
(ingot) deal into Europe and it was a lot more lucrative than
it would have been 10 days ago," a third producer said.
The U.K. spot market
for secondary aluminum ingot was quiet this week, with most
producers focusing on contracted business for the fourth
quarter until consumers are ready to start negotiations for
"Were rammed for
November, but people are waiting to see what will happen for
next year and are not looking to book too far forward,"
according to a fourth producer source.
Many producers are
unable to fill the spot orders that are coming in from Europe
because they cannot find the necessary amount of available
"The biggest problem
is the squeeze on scrap. I could have sold three times as much
volume but scrap prices are too high," a fifth producer
A diecaster added that
he expects his business volumes to grow 20 percent next
Such growth will only
exacerbate the scrap situation for secondary aluminum
A version of this
article was first published in AMM sister publication Metal