Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

Prices for US secondary aluminum smelter scrap pushed higher by 1-2¢/lb during the week. Higher scrap prices are putting pressure on secondary alloy margins once again, by increasing at a faster rate than alloy sales pricing. 


The weekly Davis Index for all aluminum shredder grades was stronger on Wednesday, with Twitch logging the largest gains, and moving up by 1.1¢/lb to 46¢/lb delivered US consumers. The index for Zorba increased by 0.5¢/lb to 39.3¢/lb delivered while Tweak rose by 1¢/lb to 40.1¢/lb delivered.


The index for Old Cast was higher by 0.1¢/lb at 38.4¢/lb delivered US consumers on Wednesday, and the index for Old Sheet increased by the same 0.2¢/lb to 39.4¢/lb delivered US consumer. 


The Davis Index for secondary MLC was better at 42.4¢/lb delivered US consumers, better by half a penny.


The official three-month LME aluminum contract closed at $1,686.50/mt, better by 50¢/mt from $1,686/mt on July 15.


The range of scrap pricing per grade has grown over the past month, with some grades listing a 5-6¢/lb differential between its high and low prices. Factors such as prompt delivery and shorter payment terms, weigh more heavily in the pricing equation now than in the previous months. This dynamic has created opportunities for both buyers and sellers to increase margins, generate cash, and build inventory depending on the deal.

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