Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

US secondary aluminum alloys prices increased across all grades on Friday after secondary smelters benefited from better global automotive demand.  However, China’s latest import quotas for aluminum scrap could mean trouble for the domestic supply-demand curve moving forward.


The weekly Davis Index for A380.1 increased by 1.7¢/lb to 76.5¢/lb delivered US consumer on Friday, while the index for A360.1 moved up by 1.3¢/lb to 86.8¢/lb delivered and A413.1 rose by 0.3¢/lb to 87.7¢/lb delivered.


The three-month LME aluminum contract closed Friday at $1,746/mt, down by $46/mt from $1,785/mt on September 18.


Strong sales have helped secondary aluminum alloy prices remain firm despite the drop in LME Aluminum over the week. Some formula-based pricing dropped this week, but spot market sales were strong, helping to push the Davis Index for secondary aluminum alloys higher. 


The market, however, is concerned over China’s release of scrap import quotas that allows for more scrap aluminum into the Asian nation for melting, which, in turn, would get some of the dormant Chinese smelter capacity back on-line. The increase in secondary alloy availability could thus put more pressure on the pricing of finished secondary alloys once again.

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