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Aluminium Scrap is on a Free Fall

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by - 6/3/2016 9358 Views

Aluminium Scrap Destabilized by Foreign Metals

The Midwest aluminum premium has dropped following nearly a month of stability, with some market participants telling that concerns about foreign metal hitting U.S. shores this summer may be one factor behind the drop.

“People expect it,” one supplier source commented on the anticipated arrival of material coming in from overseas by mid-June to early July. “I haven’t seen any specifics, but that’s a general feeling.”

“I won’t be surprised if a big chunk of units comes into the (United States),” commented a supplier.

Overall, market participants said that the spot market has remained quiet, continuing the trend of current market conditions mimicking those of the dog days of summer. One explanation for the drop in the premium aluminium scrap prices amid a general lack of business seems to be that sellers are hoping to move metal quickly even though buyers generally have full inventories and little need for spot aluminum. Anticipation of the arrival of foreign material on U.S. shores may be driving sellers' desire to move metal rapidly rather than hold onto it until market conditions improve.

“(There's) the expectation of having units showing up in the U.S. Premiums here are still the highest (globally, and sellers) don’t want to get caught the same way (they did) last year,” another supplier commented. “Maybe they’re trying to be proactive (and) get rid of some units.”  “I have not heard specifics but do not doubt it,” said a third supplier. “A couple of large tranches moved to (the United States) earlier in the year, too.”

The assessment of the spot P1020 premium dropped to 7.5 to 7.9 cents per pound from 7.75 to 8.25 cents per pound, where the premium has stayed since late April.

This time last year, the Midwest aluminium scrap premium was in the midst of a free fall from an all-time high of more than 24 cents per pound. The premium checked in at 10.25 to 10.75 cents per pound at the time, down 56.5 percent from a high of 24 to 24.25 cents per pound in mid-January to mid-February 2015. It is expected, by the end of June, 2015, the premium would drop another 20.2 percent to 8.25 to 8.5 cents per pound.

Aluminum prices on the London Metal Exchange have been fluctuating in the mid-$1,500s per tonne this week, with the three-month contract closing the official session May 26 at $1,559 per tonne (70.7 cents per pound). Meanwhile, the daily cash price closed the session at $1,553 per tonne (70.4 cents per pound).

Category : Aluminium

Tags : Aluminium Scrap, Aluminium Scrap Price, Aluminium Scrap Market, Aluminium Scrap Market Trend

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As the bright morning of 28th May dawned in the year 1972, in the fulfillment of time according to the plan & will of Almighty Godbrought me forth into this world and I was brought up & educated in Orissa. My parents provided me with the best of education in an English medium school with high standa .... more info


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