NEW YORK Prices
for deoxidized aluminum, or deox, recovered further in
December, building on gains that began in November following a
Prices were hovering
around 92.5 to 94.5 cents per pound in December, most producers
said, up from 91 to 93 cents at the end of November.
The market picked up
slightly in November (
amm.com, Dec. 4) after drifting as low as 89.5
cents per pound for Octobers end-of-month sales. The
November uptick ended a descent that began in April (
amm.com, April 3).
As in past months,
prices fell at the end of the month, with most market
participants reporting an average sales price of around 92
cents per pound during the last week of December.
There are several
factors contributing to the uptick, including a tightness of
scrap due to a recent blast of winter weather across much of
the country and increased demand from steel sheet mills that
are ramping up for a very strong first quarter, primarily in
the automotive sheet market, producers said.
"It was a very
interesting market this month," one major deox producer told
AMM. "Weve finally bottomed out. We averaged out
at the 93.5-cent rangeabout 1 or 2 cents above last
months price. We also heard some sales at the end of the
month in the 92-cent range."
Sheet mills are
beginning to offer a premium for fast deliveryoften a
sign that scrap is becoming somewhat scarce, producers said.
"We are selling at 95 (cents) spot, but that might be largely
attributable to weather," the deox producer added.
Most sources believe
prices for deox will return to a 94- to 95-cent range by the
beginning of February. The anticipated price adjustment is
largely attributable to continued demand from mills producing
material for the automotive sector.
"The mills focused on
automotive in particular are running full out," a second
producer said. "They are drawing the deox into production
faster than they can fill the bins."
A third producer said
that he was able to sell material on a non-discount basis for
the first time in several months. "We sold, made some money and
didnt participate in any discounts," but there are "still
people willing to sell way below the market," he said.
"I dont get it;
scrap is tight, dealers are holding metal waiting for the
market to go up, automotive production is skyrocketing and
there are still people willing to sell at rock-bottom prices,"
Deox aluminum, which
is used as a deoxidant in steelmaking, is usually produced in
shot, 2- and 4-ounce cones and pyramids, and 5-pound notchbar.
On average, deox is made from about 95-percent aluminum,
1.5-percent copper, 1.5-percent zinc and 1-percent