US secondary aluminum alloys prices increased for all grades with good demand and tight supply putting alloy producers on the path to finish the year strong.
The weekly Davis Index for A380.1 moved up by 2.3¢/lb to 95.8¢/lb delivered US consumer, while A360.1 increased by 3.2¢/lb to 98.2¢/lb delivered. The index for A413.1 ticked up by 1.6¢/lb to 94¢/lb delivered and A319.1 jumped by 4¢/lb to index at 98.9¢/lb delivered US consumer.
The three-month LME aluminum contract closed on Friday at $2,040/mt, up by $61.50/mt from $1,988.50/mt on Nov 27.
Tight scrap supply has pushed up raw material prices for secondary smelters. For the time being, alloy producers can keep pace with the increases in scrap tags or even grow margins in a tight alloy supply environment.
The excess capacity that is currently dormant in China and the negative economic impacts due to the continued spread of COVID-19 infections is preventing many US smelters from going long on finished inventories and helping to keep supply tight.