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

US secondary aluminum alloys prices trended higher on Friday on most grades with A380.1 breaking the 70¢/lb barrier. 


Secondary smelters had struggled to breach the 70¢/lb mark before the pandemic, citing excess global secondary aluminum capacity. Moreover, smelters struggled with aluminum scrap price increases, squeezing margins for most producers. At present though, smelters have captured the 70¢/lb range they needed because of lower production rates and less capacity.  


The weekly Davis Index for A380.1 ticked up by 0.7¢/lb to 70¢/lb delivered US consumer on Friday and increased by 0.4¢/lb to 74.8¢/lb delivered for 319.1. The index for A360.1 was flat at 81.5¢/lb delivered US consumer while A413.1 remained in line with the rest of the alloys moving higher by 0.47¢/lb to 83.4¢/lb delivered US consumers.  


The three-month LME aluminum contract closed Friday at $1,654.50/mt, down by $14.5/mt from $1,669/mt on July 10. 


The secondary aluminum industry still faces significant pressure from higher scrap prices for melting, despite the higher sales prices. Traditional secondary scrap grades such as Twitch, Old Cast, Old Sheet, and MLC all increased by a penny or more this week. 


The higher scrap pricing has kept the pressure on margins for the time being but market participants hope it will prevent any excess capacity from returning online. 

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