Secondary aluminum smelters scrap prices were mostly
steady Feb. 3 despite aluminums drop to a more than
four-and-a-half-year low on the London Metal Exchange, as
market players braced for restricted scrap flows due to
continued winter weather conditions across much of the eastern
half of the country.
The three-month LME
aluminum contract ended the official session Feb. 3 at
$1,701.50 per tonne (77.2 cents per pound), down 1.6 percent
from $1,729.50 per tonne (78.4 cents per pound) Jan. 30. The
contract fell further to $1,686.50 per tonne (76.5 cents per
pound) Feb. 4, the lowest level since hitting $1,658 per tonne
(75.2 cents per pound) July 16, 2009.
Heavy snow and
freezing rain is forecast to descend on much of the central
United States over the next 24 hours, moving from the Plains
into the Ohio Valley, according to the National Weather
Service. As the system continues to move east, colder
temperatures and heavy snow will impact locations in the
Northeast starting Feb. 5. In addition to the winter weather,
heavy rainfall could result in flooding across the Tennessee
and Ohio Valleys, according to a Feb. 4 update on the agency's website.
As a result, several
major trucking companies have posted notices announcing reduced
service to areas impacted by the weather. Overland Park,
Kan.-based YRC Freight Inc. told customers that several
shipping routes, including Denver to Kansas and Denver to
Oklahoma City, would be shut down as of Feb. 4. "Additional
routes will be closed throughout Tuesday into Wednesday," YRC
said on its website.
transportation companies noted that prolonged winter weather
had dramatically disrupted the flow of material. "Shipping
patterns have shifted across the industry and there has been a
significant impact to truckload services, drayage capacity,
dedicated services, home delivery services and brokerage
capacity," J.B. Hunt Transport Inc., Lowell, Ark., said on its
Several aluminum scrap
buyers echoed shipping companies concerns. "It will be
interesting to see if the weather systems coming across the
Midwest this week will cause even more trucking difficulties,"
one used beverage can (UBC) buyer said via e-mail. He
hadnt lowered price quotes in step with drops on the LME,
largely because material had become very challenging to
acquire, he said.
"The winter weather
has definitely impacted truck routes and also created volume
surges in areas hardest hit following the series of recent
storms. We have seen an impact where we rely on backhauling
carriers to certain areas, particularly North to South
shipments. We have responded by securing more commitments from
locally domiciled carriers, around our major shipping
customers, as opposed to relying on backhaul capacity.
Were also making a concerted effort to retain truck
capacity within our client network as opposed to relying on
spot capacity coming from other sources," Gregory Burns,
chairman, president and chief executive officer of Cranberry
Township, Pa.-based PLS Logistics Services Inc., said via
In addition to the
weather, elevated U.S. spot aluminum premiums were helping to
keep scrap prices at inflated levels.
spot P1020 premium moved to 20.75 to 21 cents per pound Jan. 29
amm.com, Jan. 30). At the start of last month, it stood at
11.5 to 12 cents per pound.
"interesting aluminum world right now," one scrap seller said.
"We are getting the same quotes at $1,686.50 three-month LME as
we did when it was $1,758."