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UK aluminium scrap prices under pressure
Edited by : AL CIRCLE
2 min read
UK aluminium scrap prices are under significant downward pressure as unfavourable exchange rate movements have rendered most non-European export markets uncompetitive, while low London Metal Exchange prices continue to provide further impetus on the downside.
“The LME continues to drift, and the dollar rate has gotten worse,” a scrap dealer said. “Sellers are at the point now where they have to sell, so there is more scrap available in the UK market.”
As availability has increased, demand has fallen away, further pressuring prices.
“The phones are just not ringing,” the scrap dealer said.
Metal Bulletin’s aluminium scrap prices fell across the board last week, and several grades slipped further on Wednesday October 2.
Commercial pure cuttings fell to £980-1,030 ($1,590-1,670) per tonne from £1,000-1,050; commercial cast slipped to £940-970 per tonne from £960-990; and commercial turnings edged down to £730-760 per tonne from £730-790.
Such has been the impact of the LME aluminium price on capping scrap prices that commercial pure cuttings are now sitting only slightly above the levels for commercial scrap grades, which have a lower yield.
“I don’t remember a time when the difference between commercial pure and, say, baled old rolled cuttings has been so narrow,” a secondary aluminium ingot producer said.
Low LME prices also make it so that secondary producers can be competitive in the remelt scrap market, bidding for highly pure scraps that tend to be exclusively the domain of primary producers. This widens the pool of scrap available to the industry and further lowers demand for the traditional secondary grades.
Scrap sellers said they do not expect the situation to improve in the near term.
“Prices are against us and the exchange rate adds pressure,” a scrap trader said. “China is shut for a week and then it’s LME week, India has not improved significantly and it is still very difficult to get good prices. There is not much improvement on the horizon.”
Meanwhile, ingot prices remained flat with few spot deals reported, though here as well there is pressure on the downside, with most deals reported in the lower half of the range.
LM24 pressure diecasting ingot stayed at £1,500-1,550 per tonne, while LM6/LM25 gravity diecasting ingot remained at £1,710-1,750.
“The LME continues to drift, and the dollar rate has gotten worse,” a scrap dealer said. “Sellers are at the point now where they have to sell, so there is more scrap available in the UK market.”
As availability has increased, demand has fallen away, further pressuring prices.
“The phones are just not ringing,” the scrap dealer said.
Metal Bulletin’s aluminium scrap prices fell across the board last week, and several grades slipped further on Wednesday October 2.
Commercial pure cuttings fell to £980-1,030 ($1,590-1,670) per tonne from £1,000-1,050; commercial cast slipped to £940-970 per tonne from £960-990; and commercial turnings edged down to £730-760 per tonne from £730-790.
Such has been the impact of the LME aluminium price on capping scrap prices that commercial pure cuttings are now sitting only slightly above the levels for commercial scrap grades, which have a lower yield.
“I don’t remember a time when the difference between commercial pure and, say, baled old rolled cuttings has been so narrow,” a secondary aluminium ingot producer said.
Low LME prices also make it so that secondary producers can be competitive in the remelt scrap market, bidding for highly pure scraps that tend to be exclusively the domain of primary producers. This widens the pool of scrap available to the industry and further lowers demand for the traditional secondary grades.
Scrap sellers said they do not expect the situation to improve in the near term.
“Prices are against us and the exchange rate adds pressure,” a scrap trader said. “China is shut for a week and then it’s LME week, India has not improved significantly and it is still very difficult to get good prices. There is not much improvement on the horizon.”
Meanwhile, ingot prices remained flat with few spot deals reported, though here as well there is pressure on the downside, with most deals reported in the lower half of the range.
LM24 pressure diecasting ingot stayed at £1,500-1,550 per tonne, while LM6/LM25 gravity diecasting ingot remained at £1,710-1,750.
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