US domestic secondary aluminum scrap prices decreased on Wednesday following a drop in ingot prices that weakened smelter demand.
The weekly Davis Index for old sheet fell by 0.6¢/lb to 70.9¢/lb delivered US consumer while old cast was flat at 70.8¢/lb delivered. Secondary MLC settled at 78.3¢/lb delivered, up by 2.6¢/lb in tandem with the related primary scrap grade. In the same context, the Davis Index for painted siding declined by 2.8¢/lb to 71.2¢/lb delivered. High-grade turnings also dropped by 0.9¢/lb to 69.3¢/lb delivered.
The official LME Aluminium cash price settled Wednesday at $2,422/mt ($1.098/lb), up by $62.50/mt from May 26. Still, LME Aluminium’s movements have had little effect on this market, which has strong fundamentals.
Zorba prices slipped by 0.5¢/lb to 63¢/lb delivered as a lack of exports led to oversupply in the domestic market. The index for Twitch fell by 1¢/lb to 76.3¢/lb delivered as the auto slowdown weighed on secondary alloys, impacting demand for this widely used raw material.
Most smelters, reeling from the full-fledged impact of the semiconductor shortage on the automotive industry, and therefore secondary aluminum scrap market, want to start reducing inventories with secondary ingot prices trending flat to down.
Buyers have pulled back pricing by 4-5¢/lb for some grades. Scrap is widely available, and prices will continue to fall steadily if this trend continues. MLC remains the only grade to have increased this week due to robust demand by mills and smelters.