US buying spreads for mill and extrusion grade scrap were wider from the prior week following a higher P1020 premium, which lifted the Midwest transaction price (MWTP) that mills base their spreads on.
The official LME Aluminium cash price settled Tuesday at $2,529.50/mt ($1.147/lb), up by $11/mt from Jun 29.
The market was quiet as buyers remained away due to the holiday weekend. Besides, ample inventory has weakened demand for scrap volumes over the past month despite some post-dated bookings being made. Buyers have widened spreads to historical levels to ensure fair pricing. In the short term, demand is expected to remain subdued as mills’ processing capacity is being hindered by labor issues making inventories last longer.
The weekly Davis Index spread for 1100 & 3003 clips was flat at 15.7¢/lb under Midwest while transaction prices for the grade rose by 1.9¢/lb to $1.28/lb delivered. Meanwhile, the spread for mill-grade MLC widened by 1.3¢/lb to 54.4¢/lb under the Midwest transaction price. Outright prices for MLC stood at 89.3¢/lb delivered US consumer, up by 0.6¢/lb. The spread for painted siding also weakened by 0.5¢/lb to 56.9¢/lb under Midwest.
Spreads for UBC scrap widened by 0.4¢/lb to 63.9¢/lb under Midwest. Transaction prices settled at 79.8/lb delivered, increased by 0.5¢/lb. Notably, litho sheet was the only grade to see tightened spreads, at 26.7¢/lb under Midwest, stronger by 6.7¢/lb as collection rates for this grade fell. A tight supply of litho saw the Davis Index for the grade at $1.173/lb, with deals heard as high as $1.20/lb.