US aluminum export prices were higher across all grades, on better demand from Asia. India is falling short on domestic aluminum scrap, while China just released its latest batch of import quotas for copper and aluminum.
Southeast Asia has positioned itself to offer 99/3 Zorba into China on the latest quotas by stockpiling some material, with most of it originating from the US, while China was out of the market. Korea is also in the market for aluminum scrap on the strength of the secondary alloy market in China and Japan.
The weekly Davis Index for 95/2 Zorba jumped by 4.3¢/lb to 47.5¢/lb fas US port as demand for aluminum scrap from Asian smelters strengthens. Secondary alloys from India, in fact, are finding their way into China via paper transfers from countries in the EU or even the US due to the ongoing border dispute between the two Asian nations.
The index for 99/3 Zorba moved up by 4.9¢/lb to 48.8¢/lb fas US port. The Davis Indexes for Taint/Tabor and Tense were both higher compared to last week, with Taint/Tabor increasing by 3.4¢/lb to 47.7¢/lb fas and Tense moving up by 1.2¢/lb to 45.1¢/lb fas US port.
The index for aluminum-copper radiators increased by 3.2¢/lb, to $1.335/lb fas on the strong Comex market, which set a new high for the year, breaking the $3/lb mark on August 19.
The official three-month LME aluminum contract increased by $33/mt up to $1,791.5/mt on Thursday, from $1,758.50/mt on August 13.
US-based scrapyards with access to aluminum export markets are enjoying better margins compared to what they could achieve in the US domestic market. However, factors such as location, freight costs, and capabilities are compelling some scrap yards to sell their tonnages to domestic smelters that are paying less for the same volumes than the export market. Those land locked yards will need to see an increase in demand for finished secondary alloys, which could force local smelters to raise pricing in line with the export market.