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

Prices for US secondary aluminum smelter scrap increased over the past week. Scrap flows have improved but are not consistent across grades and US domestic smelters are under pressure from a more active and robust export market into India.


The weekly Davis Indexes for all the aluminum shredder grades were stronger on Wednesday, with Tweak and Zorba gaining the most ground. The index for Tweak moved up by 1.7¢/lb to 42.2¢/lb delivered US consumer while Zorba rose by 1.1¢/lb to 41.5¢/lb delivered. 


Twitch landed at 47.4¢/lb delivered, up by a penny though the grade struggled to keep its approximately 10¢/lb above Zorba price difference to make its conversion profitable and reduce its supply in the marketplace.


The index for Old Cast moved up by 1.1¢/lb to 40.5¢/lb delivered US consumer on Wednesday and increased for Old Sheet by 0.9¢/lb to 41¢/lb delivered. 


The Davis Index for high-grade turnings increased by 0.1¢/lb to 35.1¢/lb delivered and declined for mixed grade turnings by 0.3¢/lb to settle at 30.5¢/lb.


The three-month LME aluminum contract closed at $1,789.50/mt, up by $11/mt from $1,778.50/mt on August 5.


The lack of consistency in available scrap grades and scrap dealers’ willingness to hold on to material in hopes of better returns have kept the prices for aluminum smelter scrap fluctuating. However, with India returning to the market in a meaningful way, pricing should become consistently more reliable across a much more comprehensive range of grades. 


Automotive demand in India picked up in July, reflecting only a 3pc decline from the same month in 2019, compared to June, which saw a 50pc decrease from the same month last year. Some believe the uptick is due to pent up demand and are waiting for the August data before claiming this as a real recovery.

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