Aluminum scrap prices in the U.S. have continued to decline since mid May, facing an on-going oversupply of material, volatile prices the London Metal Exchange (LME), uncertain trade relations with Mexico and China, and the seasonal lackluster summer months dead ahead.
The LME three-month aluminum contract closed the June 10 session 1.2% lower for the week, before moving higher in June 11 trading. Benchmark prices for A380.1 secondary aluminum alloy dropped by a similar percentage to the LME, with other secondary aluminum tags also heading lower during the week.
The oversupply of material, in part, can be attributed to China. The country drives much of the global demand for aluminum scrap and has been restricting inflows of both non-ferrous and ferrous tags into the country. A new quota system governing 2H19 inflows to China is expected July 1, however market participants believe China will continue to restrict imports of scrap material, including several grades of aluminum.
We will continue to keep you updated on market conditions through our website news section, so check back often. Metro Alloys has successfully served its clients for more than 30 years in all market conditions and we encourage you to contact your sales representative, Marvin Fish, Gary Kamp or Abby Frank with any questions.