Aluminum mill scrap spreads in the US tightened marginally for all grades on limited availability of scrap.
Primary scrap supply from the manufacturing sector has remained tight through the week with prices for most mill grades rising at a quicker pace than LME Aluminium. However, the LME market fell into backwardation this week, with cash offers exceeding the three-month contract by $7/mt.
The three-month LME contract closed Tuesday at $2,018/mt, up by $60/mt from its $1,958/mt close on Jan 19.
The spread for mill grade 1100 & 3003 clips tightened by 0.2¢/lb to 1¢/lb under the three-month LME contract while the weekly Davis Index for the grade rose by 2.9¢/lb to 90.5¢/lb delivered US consumer.
The index for 5052 clips increased by 3.1¢/lb to 98¢/lb delivered, while the grade’s spread was tighter by 0.3¢/lb at 6.4¢/lb above the three-month LME contract.
The spread for 6063 new bare scrap was wider by 0.5¢/lb at 3.4¢/lb above the three-month LME contract. The Davis Index for the grade rose to 94.9¢/lb delivered US consumer, better by 2.2¢/lb. The spread for mill-grade MLC was tighter by 2.2¢/lb at 16.5¢/lb below the three-month LME contract while the index for the grade rose by 4.5¢/lb to 75¢/lb delivered.
The executive order by President Joe Biden regarding local sourcing under the Made in America program has created optimism in the US market, but participants seem to be in a holding pattern, unsure of which way the market will move going forward.