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

Aluminum mill prices remained strong as the economic activity picked up around the globe with pricing up as much as 2¢/lb on some grades. Key economic indicators point to a U-shaped recovery and durable goods orders, a leading indicator, have increased by 15.1pc and 7.3pc in May and June, respectively. The durable orders report for July will be released on August 26 and market participants expect a further increase in this indicator.


The spread for mill-grade 1100 & 3003 clips tightened by 2.1¢/lb to 5.8¢/lb under the three-month LME aluminum contract on Tuesday while the weekly Davis Index for the grade was flat at 74.7¢/lb delivered US consumer.


The spread for scrap 6063 narrowed to 1.9¢/lb under the three-month LME aluminum contract, while the index for the grade increased by 2.1¢/lb to 76.3¢/lb delivered US consumer. The weekly spread for mill-grade MLC was better by 0.8¢/lb at 25.7¢/lb, while the index for the MLC rose by 1¢/lb to 54.8¢/lb delivered US consumer.


The Davis Index for mill grade painted siding climbed by 1.1¢/lb to 52.3¢/lb, while the spread was tighter by 0.8¢/lb, at 28.2¢/lb under the three-month LME contract. The Litho sheet grade saw its spread narrow by 0.9¢/lb to 13.4¢/lb while the index for the grade increased by 1¢/lb to 67.1¢/lb.


The three-month LME contract closed on Tuesday at $1,773.5/mt up from $1,770/mt on August 18.  


Scrap aluminum remains tight and despite better flows, production has picked up to match domestic demand. Increased export activity, with India has put pressure on scrap availability in those areas with access to the overseas market, forcing domestic mills to compete with the export market. This trend could keep the scrap market viable in the near term.

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