Prices for US secondary aluminum smelter scrap delivered US consumers continued to rise on tight supply as hopes of more material working into scrap yards have not yet become a reality.
The weekly Davis Index for all the aluminum shredder grades delivered US consumers moved higher on Wednesday, with Zorba and Tweak each gaining 1.3¢/lb to settle at 45.1¢/lb delivered US consumer, and 45.3¢/lb delivered, respectively. The index for Twitch rose by 1.6¢/lb to 51.5¢/lb delivered.
The low supply for aluminum shredder grades was previously attributed to a suppressed ferrous market and the shutdown of inbound automobiles into auto shredders. However, it is taking longer than anticipated to get the shredder grade material flowing into yards even after the ferrous market settled at higher prices in early September. Some market participants blame the manner or method of the ferrous trade and its timing for the continued tight supply.
The index for Old Cast was higher by 0.9¢/lb at 45.4¢/lb delivered US smelters on Wednesday, while Old Sheet increased by 0.5¢/lb to 45.3¢/lb delivered US consumer.
The Davis Index for high-grade turnings increased by 0.5¢/lb to 38¢/lb.
The three-month LME aluminum contract closed at $1,798/mt, up by $1.50/mt from $1,777.50/mt on September 9.
Robust alloy pricing has paved the way for better scrap pricing with A380.1 pushing well beyond the 70¢/lb mark, which seemed to be out of reach before the pandemic. Last week, the Davis Index for A380.1 approached the 74¢/lb mark.