US buying spreads for mill and extrusion grade scrap were mostly flat across grades over the past week as the LME market cooled and buyers welcomed the fall in hedged pricing.
The official LME Aluminium cash price settled Tuesday at $2,468/mt ($1.12/lb), down by $82/mt from May 11.
Many participants who stepped away last week had considered the market for mill-grade scrap as overvalued. This week, as the LME declined, most buyers were willing to pay the same spreads as demand remains strong. Still, some big mills continue to hold considerable inventories and are not actively purchasing. Scrap remains available, but competition among the mills has kept prices afloat. Besides, freight charges, especially for prompt delivery, have remained high since the beginning of this year.
On the extruder side, prices have remained rangebound since scrap supply is extremely tight because of which, secondary billet makers are ready to pay higher prices. Primary billet continues to remain unavailable in the market, but traders expect to resume business soon.
The weekly Davis Index spread for 1100 & 3003 clips widened by 0.1¢/lb to 15.7¢/lb under Midwest while transaction prices for the grade fell by 3.4¢/lb to $1.236/lb delivered.
Meanwhile, the spread for mill-grade MLC slipped by 3.8¢/lb to 46¢/lb under the Midwest transaction price. Outright prices for the grade were at 93.3¢/lb delivered US consumer, down by 6.5¢/lb. The spread for painted siding widened by 2.1¢/lb to 43.7¢/lb under Midwest.
Spreads for 6063 new bare extrusion scrap tightened by 0.8¢/lb to 9¢/lb under Midwest, staying at the 10¢/lb under the levels seen in April. Outright prices settled at $1.303, delivered, down by 2.5¢/lb.