Aluminum scrap, alloy prices up on LME surge

Free-market aluminum scrap and secondary alloy prices recorded gains on this week’s surge in London Metal Exchange prices, although some players believe prices will settle down shortly.

Twitch moved up to a range of 82 to 83 cents per pound from 81 to 83 cents, while secondary-grade painted siding moved up to 72 to 74 cents per pound from 71 to 73 cents.

Meanwhile, mill-grade aluminum scrap prices rose significantly, with 5052 segregated clippings moving up to a range of 97 to 99 cents per pound from 94 to 96 cents and mixed low-copper clippings moving up to 83 to 84 cents per pound from 80 to 82 cents.

A380.1 widened to $1.02 to $1.04 per pound from $1.02 to $1.03, while A413.1 tightened up to a range of $1.09 to $1.10 per pound from $1.08 to $1.10.

The LME’s North American special aluminum alloy contract (Nasaac) cash price traded at $1,900 per tonne (86.2 cents per pound), in Friday's official session, up 1.3 percent from $1,875 per tonne (85 cents per pound) on Monday.

Scrap market participants reported brisk trading following the New Year’s break, with many citing the fiscal cliff deal as a contributing factor.

“With the fiscal cliff stuff, there was a lot more transacting than I had expected,” one broker said. “I think it was psychological. Some people probably saw the price of copper jump, got scared and wanted to do a little bit of business.”

One buyer postulated that strong buying levels from certain consumers were also forcing prices up.

However, both buyers and sellers said that they expect prices to settle as the optimism associated with the fiscal cliff agreement wanes.

Meanwhile, one alloy producer reported a sale of four truckloads of A380.1 at $1.05 per pound, while one die caster said that he purchased A380.1 at $1.01 per pound, having also been quoted Nasaac material at 98 cents.