Aluminum mill prices increased during the week in tandem with a rising LME Aluminium market. Scrap aluminum mill spreads stabilized with some movement in specific grades. The mills are concerned about the continued tightening of scrap flows moving into the winter months, especially with many states looking to reduce the spread of the COVID-19 pandemic with a new round of restrictions.
The spread for mill-grade 1100 & 3003 clips tightened by 0.6¢/lb to 4.2¢/lb under the three-month LME Aluminium contract on Tuesday, while the weekly Davis Index for the grade increased by 1.2¢/lb to 84.8¢/lb delivered US consumer. The Davis Index for 5052 rose by 2.4¢/lb to 87.1/lb delivered, with the spread flat at 1.9¢/lb, unchanged from a week ago, under the three-month LME Aluminium contract.
The spread for scrap 6063 was tighter by 0.1¢/lb at 3.9¢/lb under the three-month LME Aluminium contract, while the index for the grade increased by 5.3¢/lb to 89¢/lb delivered US consumer. The weekly spread for mill-grade MLC narrowed by 0.1¢/lb to 27.1¢/lb, while the index for the category climbed by 3.2¢/lb to 58.7¢/lb delivered US consumer.
The three-month LME Aluminium contract closed stronger by $61/mt at $1,961/mt on Tuesday, from $1,900/mt on Nov 10.
The market has shifted on concerns of supply tightness due to the cold weather and the application of new travel restrictions and lockdowns imposed by several states to combat the spread of the COVID-19 pandemic. The price range for various grades has begun to widen as consumers look to fill inventory gaps and pay substantial numbers to entice sales into some facilities with credit issues.
Transportation costs are also playing a role in better pricing, with consumers bumping up prices to help cover the increase in freight to procure the material needed for their melt plans.