Spreads for US mill grade aluminum extruder scrap were flat on Tuesday as consumers wait on pricing direction after Monday’s market selloff.
The Davis Index spread for A356 scrap wheels was unchanged at 27¢/lb under LME on Tuesday, with outright prices for A356 wheels settling at 55¢/lb, down two cents from last week.
Spreads for mill-grade MLC remained at 31¢/lb, while mill-grade painted siding spreads held at 38¢/lb. Spot deals on both grades were priced at 49¢/lb for mill-grade MLC and 47¢/lb for painted siding. The spread for Litho sheet scrap remained at 16.5¢/lb with outright pricing for the grade decreasing to 63¢/lb.
Spreads for 6063 were at 10¢/lb, the same as last week, with spot pricing down a penny to 69¢/lb. UBCs’ spreads were unchanged from last week at 26.5¢/lb with outright pricing down by 2¢/lb on Tuesday in the 52-53¢/lb range across most of the US, down by .
Spot prices were lower by 1-2¢/lb on the weakness in the three-month LME aluminum exchange, which was down by 2.9¢/lb to $0.7947/lb from last week’s $0.8244/lb.
Market participants expect the spreads to tighten soon to keep the scrap flows moving because of the decreases in LME pricing.
The market is also gauging the potential impact of coronavirus to the global supply chain. The extent of the spreads tightening is up for debate and hard to determine until there is clarity on if and by how much supply will be affected by the epidemic.
If supply chains are impacted, local and regional pricing could take hold and create segmented markets across the US based on consumer demand and local supply.