AMM.com Copying and distributing are prohibited without permission of the publisher
Email a friend
  • To include more than one recipient, please separate each email address with a semi-colon ';', to a maximum of 5


Aluminum deox prices jump on scrap tightness

Keywords: Tags  aluminum deox, scrap, steel, advanced high-strength steel, AHSS, aluminum, scrap prices, Nathan Laliberte


NEW YORK — 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 AMM.

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 be better."

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 magnesium.

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 don’t 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 better-quality deox.

"What’s 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 steel."

The producer declined to comment on the current market price for high-purity deox, citing "low production numbers" and a "relatively untested market."


Have your say
  • All comments are subject to editorial review.
    All fields are compulsory.



Latest Pricing Trends