The weekly US secondary aluminum smelter scrap prices increased across all grades on Wednesday. Supply could continue tightening as the winter months begin and states contemplate lockdown measures amid a spike in COVID-19 infections in many regions across the US.
The weekly Davis Index for Zorba moved higher by 2.6¢/lb to 54.8¢/lb delivered US consumer. Tweak increased by 2.1¢/lb to 57.9¢/lb delivered and Twitch climbed by 1.6¢/lb to 65.9¢/lb delivered. All the shredder grades hit or matched their highs for the year. Smelters are finding some quality issues when having to reach for scrap due to the tightness in the current supply.
The index for Old Cast moved up by 2.8¢/lb at 54.6¢/lb delivered on Tuesday, and Old Sheet increased by 3.8¢/lb to 54.6¢/lb delivered US consumer.
The Davis Index for high-grade turnings rose by 3.1¢/lb to 49.4¢/lb. In comparison, the 2000/7000 series turnings moved up by 1.4¢/lb to 43.4¢/lb delivered.
The three-month LME aluminum contract closed at $1,994/mt, up by $70.50/mt from $1,923.50/mt on Nov 11.
Smelters still face margin challenges with the gains in the price of scrap outpacing those in secondary alloys. The A380.1 grade has breached the 90¢/lb mark, up 5¢/lb since the start of November, while Twitch has moved higher by 7¢/lb in roughly the same time frame.