Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

US buying spreads for mill and extrusion grades widened over the past week as the physical market tried to restrict outright pricing in the face of rising LME Aluminum prices. 

 

The official LME Aluminium cash price settled Tuesday at $2,434.50/mt ($1.104/lb), up by $45.50/mt from Apr 27. 

 

Buyers continued to widen spreads to keep outright prices rangebound amid stable and adequate scrap flows. A wide range of prices, some 10¢/lb apart were heard for a few grades, dependent on inventories. 

 

Some large mills have stocked up and started bookings for June at wider or similar spreads. Meanwhile, spot traders and mills with lower inventories are willing to pay higher prices to procure scrap in a highly competitive market. 

 

The weekly Davis Index spread for mill-grade MLC widened by 3.4¢/lb to 42.6¢/lb under the Midwest transaction price. Outright prices for the grade tallied at 93.7¢/lb delivered US consumer, up by 0.1¢/lb. The spread for painted siding weakened by 0.2¢/lb to 41.6¢/lb under Midwest. 

 

Meanwhile, the spread for 1100 & 3003 clips widened by 1.8¢/lb to 15.3¢/lb under Midwest while transaction prices for the grade rose by 1.7¢/lb to $1.21/lb delivered. 

 

Transportation costs continue to increase overheads for scrap deliveries. Some buyers are now switching to rail freight since trucking costs are eating into their margins. 

 

Spreads for 6063 new bare extrusion scrap widened by 3.2¢/lb to 12.7¢/lb under Midwest. The grade was consistently traded around 5-7¢/lb under in April. Outright prices settled at $1.236/lb delivered, up by 0.3¢/lb.

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