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

Weekly US buying spreads for mill and extrusion grade scrap narrowed after months of wide spreads following a drop in LME to its April levels. 


The official LME Aluminium cash price settled Tuesday at $2,375.50/mt ($1.077/lb), down by $83/mt from Jun 15. 


Price disparity among mills continues as some are flush with inventory while others are still actively buying. Sellers continue accepting lower prices to liquidate material since the available scrap volumes are more than they can hold profitably. With many buyers placing orders as far out as late August, most sellers are more than willing to lose a few cents per pound if the orders are for prompt delivery. Freight continues to be a major disruptor in this market, with costs surging every week. 


The weekly Davis Index spread for 1100 & 3003 clips tightened by 2.1¢/lb to 12.2¢/lb under Midwest while transaction prices for the grade fell by 1.9¢/lb to $1.235/lb delivered. 


Meanwhile, the spread for mill-grade MLC narrowed by 0.9¢/lb to 49.9¢/lb under the Midwest transaction price. Outright prices for the grade fell to 85.8¢/lb delivered US consumer, down by 3.1¢/lb. The spread for painted siding also strengthened by 2.3¢/lb to 52.2¢/lb under Midwest.


Spreads for 6063 new bare extrusion scrap tightened 0.7¢/lb to 10.4¢/lb under Midwest. Transaction prices settled at $1.253/lb delivered, down by 3.3¢/lb. 


Market participants expect these conditions to prevail through fall. It may take a few weeks until most mills need to buy large quantities of scrap. Until then, buyers will continue to put downward pressure on small volumes. Some participants are heard to have tried to inflate the market by creating an artificial shortage in a well-supplied market right now. 

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