US secondary aluminum smelter scrap prices increased over the past week, continuing to put pressure on margins for secondary aluminum smelters. However, pricing has started leveling off now as supply became more readily available.
The weekly Davis Index for all the aluminum shredder grades were stronger on Wednesday, with Tweak gaining the most ground and moving up by 0.7¢/lb to 44¢/lb delivered US consumer. Zorba and Twitch moved up by half-a-penny to 42.2¢/lb delivered and 48.5¢/lb delivered, respectively.
Offers for Twitch were higher, but some smelters pushed back, saying it did not fit into their program at those rates with secondary aluminum alloys’ current price.
The index for Old Cast climbed by 1.8¢/lb to 43.4¢/lb delivered on Wednesday and the index for Old Sheet increased by 1.4¢/lb to 42.9¢/lb delivered US consumer.
The Davis Index for high-grade turnings increased by 0.7¢/lb to 36.7¢/lb delivered and rose by 2.3¢/lb for mixed turnings to 33.2¢/lb delivered.
The three-month LME aluminum contract closed at $1,779/mt, down by $4.50/mt from $1,783.50/mt on August 19.
The export market has put pressure on US domestic scrap, but flows have improved over the week with better activity in production for the US. Pricing began to level off this week after the initial push, signaling that scrap is becoming more available.