NEW YORK Prices for most grades of secondary aluminum smelters scrap continued to rise in the past week, buoyed by higher exchange prices and a spike in U.S. Midwest aluminum premiums.
"You are seeing higher prices on items because of the premium," one scrap trader told AMM, "although the consensus is that the premium will come down sometime soon."
AMMs spot P1020 premium increased to 19 to 20 cents per pound Jan. 15 from 15 to 16.5 cents a week earlier and up about 66 percent from 11.5 to 12 cents in late December.
Notable movers included twitch, a high-grade nonferrous auto shred, which rose to 79 to 81 cents per pound from 76 to 78 cents, and used beverage containers (UBCs), which jumped to 75 to 77 cents per pound from 70 to 72 cents.
"There is a major buyer that was buying twitch in the neighborhood of 78 cents two days ago," the trader said Jan. 16. "Today, they reluctantly said they would go up to 80 (cents). They have moved it up to 80 cents but have said they would not go a penny higher." The trader added that he had heard prices from smaller buyers in a range of 81 to 82 cents per pound.
"Wow! Premium is just causing much pain," one UBC buyer told AMM in an e-mail. "Today we are at 79 cents per pound delivered but hearing higher." The buyer noted that his prices had risen nearly 5 cents over the past week. "I have not seen things move this quickly in quite some time."
The primary aluminum cash contract on the London Metal Exchange ended the official session Jan. 16 at $1,752 per tonne (79.5 cents per pound), up 2.1 percent from $1,716 per tonne (77.8 cents per pound) Jan. 10.
Meanwhile, prices for secondary aluminum alloy were all up 1 cent Jan. 16, with sellers noting that "the time was ripe to push prices higher."
Prices for A380.1 moved up to $1.03 to $1.05 per pound, 319.1 increased to $1.08 to $1.09, 356.1 rose to $1.09 to $1.10 and low-copper A360.1 and A413.1 alloys increased to $1.09 to $1.11 per pound.
"I started the week selling a few loads at $1.04 per pound for 380, but I am now getting $1.05," one major alloy producer said.