Prices for US secondary aluminum smelter scrap climbed for all grades on Wednesday amid tight supply and strong demand.
The weekly Davis Index for Zorba moved higher by 2.2¢/lb to 69.2¢/lb delivered US consumer. Tweak increased by 2.1¢/lb to 70.1¢/lb delivered and Twitch jumped by 3¢/lb to 77¢/lb delivered, all recording highs for the year yet again.
The domestic shredder grades market is facing significant competition from exports, with export Zorba breaching the 70¢/lb mark in recent weeks and slated to move higher again this week. Thus, domestic smelters are paying higher rates to procure what they need.
The index for Old Cast increased by 1.7¢/lb to 62.1¢/lb delivered US consumer on Wednesday, and Old Sheet rose by 0.6¢/lb to 60.8¢/lb delivered. The Davis Index for high-grade turnings increased by 0.9¢/lb to 54.2¢/lb delivered US consumer. In comparison, 2000/7000 series turnings moved to 46.7¢/lb delivered, better by 1.1¢/lb.
The three-month LME Aluminium contract closed at $2,008.50/mt on Wednesday, down from $2,045.50/mt on Dec 16.
Supply continues to tighten despite the rise in ferrous scrap prices, which were projected to increase scrap flows into dealers’ yards. However, the large jump in the ferrous market has yet to materialize in any meaningful way for aluminum scrap. Market participants blame the continued spread of COVID-19 and the upcoming holiday season as the primary reasons for limited scrap availability.