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Zorba export prices flat despite twitch spikes

Keywords: Tags  zorba, nonferrous auto shred, aluminum scrap, primary aluminun, twitch, Nathan Laliberte

NEW YORK — Weak international demand for zorba, a nonferrous auto shred, has prevented possible price increases for the grade, despite recent spikes in the domestic price of twitch, a high-grade nonferrous auto shred.

The price of domestic twitch has risen to 83 to 85 cents per pound in the past week, up around 5 percent from 79 to 81 cents previously, market participants said.

But U.S. export prices for zorba have remained relatively steady over the past few weeks, sources said. Material with 94- to 95-percent metallic content is unchanged at 73 to 75 cents per pound, while 90- to 92-percent material remains at 70 to 71 cents.

Buyers at Chinese aluminum smelters cited several reasons for a recent lack of interest in zorba, including a steep decline in the price of primary aluminum in China, which has made zorba "a less-attractive option to domestic prime."

"It is absolutely true that we are buying more prime material in China," a buyer at a major aluminum smelter in China told AMM. "Sure, we are still buying zorba in the United States but we are buying at our price, not the supplier’s price." Asked about sentiment among U.S.-based exporters, he said that "generally suppliers want too much for their zorba and we have been reducing offers for people who want too much for their material. This has caused them to hold material and wait for higher prices."

Several exporters confirmed the buyer’s comments. "They refuse to raise prices," one major exporter said. "Margins are under duress because there is too much metal around, and primary aluminum in China has dropped to a very low level and they are not as keen on scrap."

Buying scrap has become more of an alternative than a need for Chinese buyers, the exporter added. "They are far less aggressive because they know they have an alternative feed source that will give them much less of a headache."

Several exporters expressed confusion about the lack of correlation between zorba and twitch. "Zorba has not followed twitch up in price," one exporter told AMM. "The two grades are not correlating right now. In turn, I won’t be selling as much zorba and will hold back material until prices return to more favorable levels."

The exporter added that he had recently explored the option of turning his zorba stock into twitch through heavy media separation. "I could probably sell twitch domestically at about 83.5 cents per pound right now," he said. The exporter declined to comment on the cost of producing twitch from zorba, but said he felt the "operation could be quite profitable."

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