US buying spreads for mill grade scrap trended flat over the past week while extrusion spreads tightened following a jump in LME Aluminium prices.
The official LME Aluminium cash price settled Tuesday at $2,549.50/mt ($1.156/lb), up by $115/mt from May 5.
Strong market fundamentals kept spreads flat over the past week. Scrap flows were notably slower than the past few weeks, while demand continues to strengthen with all parts of the economy catering to pent up requirements. Some buyers are beginning to reduce purchases after months of heavy buying, which has led to healthy inventories.
On the extruder side, raw materials are scarce amid tight extrusion scrap flows. Some sellers are struggling to procure material despite offering higher prices. With the billet market effectively mute, extrusion scrap is being chased to fill the gap.
The weekly Davis Index spread for mill-grade MLC slipped by 0.2¢/lb to 42.8¢/lb under the Midwest transaction price. Outright prices for the grade were at 99.8¢/lb delivered US consumer, up by 6.1¢/lb. The spread for painted siding weakened by 5.2¢/lb to 41.6¢/lb under Midwest as demand for the grade fell over the past few days, correcting from a spike in late April.
Meanwhile, the spread for 1100 & 3003 clips widened by 0.3¢/lb to 15.6¢/lb under Midwest while transaction prices for the grade rose by 6¢/lb to $1.27/lb delivered.
Spreads for 6063 new bare extrusion scrap widened by 2.9¢/lb to 9.8¢/lb under Midwest, returning to the 10 under price level of April. Outright prices settled at $1.328, delivered, up by 9.2¢/lb.