Aluminum mill scrap prices remain strong but have begun to level off as the market finds a balance between supply and demand. The LME aluminum gave away it gains over the week because of which spreads tightened.
The spread for mill-grade 1100 & 3003 clips was tighter by 1.9¢/lb at 6.1¢/lb under the three-month LME aluminum contract on Tuesday while the weekly Davis Index for the grade increased by 0.3¢/lb to 74.8¢/lb delivered US consumer.
The spread for scrap 6063 was stronger at 3.7¢/lb under the three-month LME aluminum contract, while the index for the grade increased by 0.5¢/lb to 77¢/lb delivered US consumer. The weekly spread for mill-grade MLC narrowed by 1.3¢/lb to 26.7¢/lb, while the index for the grade decreased by 0.3¢/lb to 54.2¢/lb delivered US consumer.
The Davis Index for mill grade painted siding fell by 0.3¢/lb to 52.2¢/lb delivered, while the spread narrowed by 1.3¢/lb to 28.7¢/lb under the three-month LME contract. The spread for Litho sheet narrowed by 3.3¢/lb to 10.8¢/lb while the Davis Index for the grade increased by 2¢/lb to 70¢/lb.
The three-month LME contract closed on Tuesday at $1,783/mt, up from $1818/mt on September 1.
Robust activity in the aluminum scrap market has increased the availability of the material across some grades. As a result, prices fall in line with traditional spreads and market fundamentals when the grades needed by mills are present but go in an unexpected direction when gaps occur in the availability of some grades. This mixed trend has been responsible for the uncertain pricing and the divergent spreads being witnessed more recently.