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

Aluminum mill and extruder scrap moved higher by around 1.2¢/lb on robust demand and supply of scrap for certain grades and LME aluminum ticking up after a drop last Tuesday.


The spread for mill-grade 1100 & 3003 clips narrowed by 1.3¢/lb to 4.8¢/lb under the three-month LME aluminum contract on Tuesday while the weekly Davis Index for the grade increased by 2.3¢/lb to 77.1¢/lb delivered US consumer. The 5052 grade moved higher by half a penny to 78.2¢/lb, with the spread for the category tightening by 1.7¢/lb to 3.7¢/lb under the three-month LME aluminum contract. Both, 1100 & 3003 clips and 5052 are benefitting from strong demand in Texas and the southern regions of the country.


The spread for scrap 6063 strengthened to 3.7¢/lb under the three-month LME aluminum contract, while the index for the grade increased by 0.5¢/lb to 78.7¢/lb delivered US consumer. The weekly spread for mill-grade MLC, however, widened by 0.4¢/lb to 27.1¢/lb while the index for the category increased by 0.6¢/lb to 54.8¢/lb delivered US consumer.


The index for mill grade painted siding decreased by 0.4¢/lb to 52.8¢/lb, while the spread weakened by the same amount to 29.1¢/lb under the three-month LME contract. The spread for Litho sheet also widened by 0.4¢/lb to 11.2¢/lb while the Davis Index for the grade increased by 0.6/lb to 70.6¢/lb.


The three-month LME contract closed on Tuesday at $1,806.50/mt, up by $23/mt from $1,783.50/mt on September 8.  


The export aluminum scrap market and more competition in the US has kept scrap tight and pricing robust for now. Market participants believe the uptick will last until the US presidential election, which is 49 days away, and then diverge based on who wins the race to the White House.

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