UK aluminium scrap and secondary price falls continue apace

UK secondary aluminium and aluminium scrap prices continued to fall on Wednesday November 4, and will drop further as scrap sellers face a rising need to shift material.

“It’s getting worse quickly,” a scrap merchant said. “Sentiment has gone negative very fast, and demand is getting worse.” 

Commercial pure cuttings fell to £750-800 ($820-874) per tonne from £780-800 previously; loose old rolled cuttings reached £570-630 per tonne from £600-630; baled old rolled cuttings slipped to £650-700 per tonne from £670-720; commercial cast fell to £750-800 per tonne from £780-830; cast wheels reached £870-900 per tonne from £900-930; commercial turnings slid to £500-550 per tonne from £530-580; and group 7 turnings fell to £350-400 per tonne from £370-400.

Prices are falling as UK buyers take advantage of the lack of demand for UK scrap coming from international markets, as diecasters in those markets feed their operations with cheaper primary metal instead.

“The scrap merchants that sell to India or China are now all saying they can’t sell there now,” an ingot producer said.

The result is that there is a lot of scrap metal in the UK, and in a falling market there is not much demand for nearby deliveries.

“We’re not buying scrap because it will be cheaper tomorrow,” a second producer said. “We’ll be in the market in December, and we want prices down another £100 [per tonne] by then.”

Traditionally, scrap dealers have been able to delay sales for substantial periods of time when prices are unfavourable, but that is less the case now and buyers are exploiting the situation.

“There’s a little bit of resistance on a couple of grades, but generally they’re all sliding down, and certain grades are almost unsellable,” a third producer said. “The amount of scrap being offered to us is tremendous.”

Scrap and secondary aluminium prices are forecast to keep falling in the coming weeks as they are substantially higher than all-in primary aluminium prices, which have crashed this year as both the LME aluminium price and the Metal Bulletin aluminium premium have plummeted.

Secondary ingot prices fell sharply again on Wednesday. LM24 pressure diecasting ingot fell to £1,280-1,350 per tonne from £1,330-1,380, while LM6/LM25 gravity diecasting ingot reached £1,450-1,500 per tonne from £1,500-1,530.

“We bought a few loads in the past week and prices were up to £80 below the mid-point from the week before,” a diecaster said. “There is so much available, and scrap keeps falling.”

Like the producers delaying scrap purchases, there is not a lot of spot demand for ingot from consumers.

“If we’d done any spot business this week, I dread to think about the price, but it would have been a lot lower than last week’s prices,” the second producer said.

Jethro Wookey 
jwookey@metalbulletin.com
Twitter: @jethrowookey

Jethro Wookey

jwookey@metalbulletin.com

Published

Jethro Wookey

November 05, 2015

11:48 GMT

London