NEW YORK Prices for secondary aluminum alloys held steady this past week as producers said limited supply coupled with robust demand from the automotive sector was supporting the lower end of the market.
Producers noted that several smelters were either in the process of bringing furnaces back online or dealing with issues related to furnace repair.
"We are just getting our furnace back online this week and weve had to go into the market and buy 380 from two competitors, but did inquiries into five competitors and found things to be very tight," one alloy producer told AMM, adding that major producers were taking a "hand-to-mouth" approach to inventory because of continued automotive demand. "Basically, things are really tight on secondary new production specification ingot."
A380.1, a major component in automotive manufacturing, continues to have a relatively wide trading range, as some producers reported sales around $1.01 per pound while others said $1.04 to $1.05 per pound is achievable.
"I sold three loads at $1.04 at the end of last week," one producer said, adding that his average sales pricebased on loads sold in the past five dayswas around $1.025 per pound. "The higher numbers are there, you just have to know where to look."
Others said that news of Bermco Aluminums temporary shutdown (amm.com, Nov. 4) had caused consumers to take a more proactive stance to purchasing. "Its a psychological thing and everybody starts to scramble. Customers will try to go into the other smelters and buy in. It forces people to find metal on short notice," a secondary aluminum alloy trader told AMM, noting that prices typically stabilize or edge higher when a major producer is forced to cease output. "Things are tight enough that people are not keeping huge amounts of metal around."
The North American special aluminum alloy contract closed the official session on the London Metal Exchange at $1,822 per tonne (82.6 cents per pound) Nov. 5, down 2.9 percent from $1,875.50 per tonne (85.1 cents per pound) Oct. 30.