The spreads for aluminum mill scrap delivered US mills widened for most grades amid the summer slowdowns while the prices decreased for some grades.

 

Caution remains the strategy of choice for mill procurement models across the country. Scrap supply, which has increased over the past week could benefit from the lack of an export market as China’s new waste restrictions have prompted shipping companies to suspend sending cargoes to the Asian country’s ports.  

 

The spread for mill-grade 1100 & 3003 clips widened by 2¢/lb to 12¢/lb under the three-month LME aluminum contract on Tuesday while the weekly Davis Index for the grade decreased by 0.3¢/lb to 65.5¢/lb delivered US consumer.

 

The spread for scrap 6063 was wider at 11.6¢/lb under the three-month LME aluminum contract, while the index for the grade decreased by 0.3¢/lb to 66¢/lb delivered. The weekly spread for mill-grade MLC was worse at 27.1¢/lb, while the index for mill-grade MLC rose by 0.6¢/lb to 50.4¢/lb delivered.

 

The Davis Index for mill grade painted siding pricing increased by 0.2¢/lb to 48.2¢/lb delivered, while the spread was slightly wider by 1.3¢/lb. Litho sheet had better demand and saw its spread tighten by 2.2¢/lb on some spot deals with mills looking for inventory. The index for the grade increased by 0.7¢/lb to 61.7¢/lb.

 

The three-month LME contract closed Tuesday at $1,709/mt up by $26.50/mt from $1,682.50/mt on July 21.  

 

The aluminum scrap market could soften before moving into the Fall season because of lower seasonal demand from mills at present and expectations of more supply becoming available domestically due to the interruptions in the global supply chain. 

 

Market participants remain concerned over the COVID-19 pandemic and the potential for a second round of shutdowns if the US is not able to get new cases under control. Together, these factors could culminate into a perfect storm for the aluminum scrap industry, if the second round of shutdowns should happen.

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