Secondary aluminium smelters’ scrap prices fall in USA

Prices for most grades of secondary aluminium smelters’ scrap fell on December 2, precipitated by lower demand from mills and weakening terminal markets, according to industry sources.

Several sellers said they had seen reduced demand from most domestic consumers over the past week.

“What I am being told is that a lot of consumers don’t want material,” one scrap seller said. “It’s the end of the year, they don’t want a lot of orders and terminal markets are hitting the skids. Demand is really slowing down right now.”

The London Metal Exchange primary aluminium cash contract ended the official session on Tuesday December 3 at $1,695 per tonne, down 0.3% from $1,699.50 per tonne the previous day and off 2.2% from $1,734 per tonne on November 25.

The contract is down 6.7% from $1,817.50 at the beginning of November.

One consumer also attributed recent price cuts to weakening demand from downstream consumers. “We have probably reduced capacity by about 10 to 20% because of reduced needs from our clients,” he said. “Also, we’re in December, historically a slower month. We just don’t need as much scrap, and we don’t have a firm grasp on what January and February have in store.”

But that perceived weakness is being countered by increasingly competitive quotes from consumers supplying the auto sector, one trader said. “There has been some decline in the normal quotes. But I can say that I have been trying to grab those lower quotes and have not been able to be successful. We have tried to buy material at a reasonable price but have been regularly shut out.”