Producers of aluminum deoxidant, or deox, saw prices rise in
January as elevated Midwest premiums coupled with a prolonged
spat of winter weather across much of the Midwest and Northeast
led to "a very real shortage of scrap," sources told
Prices were hovering
around 94 to 96 cents per pound in January, most producers
said, up from 92.5 to 94.5 cents at the end of December.
Several deox producers
noted that steel mill buyers were more willing to entertain
higher price quotes due to the tightness of scrap.
"There was a great
reservation from the mills on doing anything foolish this month
because scrap is in such short supply," one producer told
AMM, adding that he had been able to achieve numbers
that were about 2 cents higher from the previous month.
"Generally speaking, we did extract better numbers. The average
for us was somewhere in the 94- to 96-cent range."
However, producers are
still experiencing margin pressure despite the price increase.
Deox is a scrap-driven product, priced largely off formulas
derived from the scrap market, and molten aluminum costs tend
to rise in-step with upticks in scrap pricing.
"If you take it in
simple terms, there is still no money to be made at the
mid-90s-(cent-per-pound) price," the producer said. "Yes, it is
a better price, but you have to determine what has driven it to
Aluminum deox, 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
The "deox market has
been on a steady incline," but prices have yet to reach a range
where solid margins are achievable, a second producer said.
"Because we have other products to sell and dont need to
sell deox to stay afloat, we have been selling smaller
quantities at 97 cents per pound and passing on lower business.
... Strong demand and bad weather are really driving this
market right now."
One area where
producers might achieve better margins is in a relatively new
grade of higher-purity deox, designed specifically for use in
specialty steels such as advanced high-strength steel (AHSS).
And as demand from the automotive industry for AHSS continues
to climb, producers are noticing increased interest for
interesting about deox is that high-strength steels demand
high-purity deox," the first producer said. "The whole thing is
in its infancy now, but they are beginning to demand
higher-priced deox for the production of higher-priced
The producer declined
to comment on the current market price for high-purity deox,
citing "low production numbers" and a "relatively untested