Prices for US secondary aluminum smelter scrap trended mostly flat over the past week. A healthy inventory at the beginning of the year, before the COVID-19 related shutdowns, and tepid demand since then, has left secondary aluminum smelters in a decent position to buy scrap.
Smelters that find themselves short on a grade are ready to pay higher prices for prompt scrap deliveries but, prices drop back to a number more reflective of the overall supply and demand curve for the material—which is much lower than pre-pandemic levels—once that grade reaches par.
The weekly Davis Index for aluminum shredder grades were all flat on Wednesday, with Tweak and Zorba increasing by 0.1¢/lb to 38.1¢/lb del US smelter and 35.9¢/lb delivered, respectively. Twitch held at 42.6/lb delivered.
The index for Old Cast ticked up by 0.2¢/lb to 36¢/lb delivered US smelters on Wednesday and remained the same for Old Sheet at 37.3¢/lb delivered.
The Davis Index for secondary MLC held at 41.4¢/lb delivered US smelter and decreased by 0.2¢/lb to 38¢/lb delivered for painted siding.
The three-month LME aluminum contract closed at $1,587/mt, down $13/mt from $1,600/mt on June 17.
Consumption numbers have ticked up for the US, and if they continue, demand numbers should follow, giving the secondary aluminum industry the shot in the arm it needs.