Aluminum scrap prices dip slightly

Some grades of secondary smelters’ aluminum scrap fell on May 28, as market participants said that scrap supply continued to loosen over the past week.

Prices for old sheet, which serves as a primary feedstock for the production of aluminum alloy A380.1, fell a penny to 67 to 69 cents per pound from 68 to 70 cents per pound May 23.

"People are acting like there is plenty of scrap to go around," one scrap trader said. "I am not sure that that opinion is entirely true. We are still seeing some overall tightness in terms of supply."

Used beverage cans followed trends in terminal markets on May 28, with prices moving to 73 to 75 cents per pound picked up from 74 to 76 cents.

The cash primary aluminum contract on the London Metal Exchange ended the official session at $1,808 per tonne (82 cents per pound) May 28, down slightly from $1,826 per tonne (82.8 cents per pound) May 23. The contract regained a little ground May 29, ending the official session at $1,821 per tonne (82.6 cents per pound).

Despite a weakening scrap market, secondary aluminum alloys were largely unchanged May 28 as producers said they wouldn't reduce prices in reaction to lower scrap tags.

"We have to make up for the previous months' margin pressure," one alloy producer told AMM. "I am holding at $1.04 per pound for A380.1 and don't have any immediate plans to change that price."

Meanwhile, prices for mill-grade aluminum scrap were steady, as sources said that tepid market activity had reduced price volatility.

All other secondary grades were unchanged.