The prices for aluminum mill scrap delivered US mills were as much as 4¢/lb higher depending on grade over the past week.
Mill inventories and promptness of delivery continue to play significant roles in determining the price of the material. According to market participants, the business continues to improve but has not returned to normal levels for this time of year. Scrap availability is better only for some grades, creating spot deals and pricing that does not necessarily trend with the rest of the market in order of magnitude.
Spreads, which widened over the past couple of weeks, did tighten this week as spot deals contracted the numbers against weaker LME aluminum, which peaked on July 14 and looks to regain some of what it lost during Tuesday’s close.
The spread for mill-grade 1100 & 3003 clips tightened by 1.7¢/lb to 10¢/lb under the three-month LME aluminum contract on Tuesday while the weekly Davis Index for the grade increased by 1.5¢/lb to 65.8¢/lb delivered US consumer.
The spread for scrap 6063 was tighter at 9.1¢/lb under the three-month LME aluminum contract, while the index for the grade increased by 2.3¢/lb to 66¢/lb delivered US consumer. The weekly spread for mill-grade MLC was better at 28¢/lb, while the index for the category rose by 1.4¢/lb to 48¢/lb delivered US consumer.
UBCs were the only grade to lose ground this week with the Davis Index for the grade dropping by 0.3¢/lb to 48.9¢/lb. Beverage cans sales have been strong and new aluminum cans are in short supply. However, aluminum can producers have struggled to keep up with demand as the big three soda makers have reduced product SKUs to focus on their best-selling brands to keep up with the increase in demand due to the pandemic.
The three-month LME contract closed on Tuesday at $1,682.5/mt up from $1,675/mt on July 14. The market dropped to $1,654.5/mt before rebounding over the last two days.