UK secondary aluminium ingot prices rose strongly on Wednesday January 30, as exchange rate movements further improved prices in Europe and helped boost domestic prices as a result.
LM24 pressure diecasting ingot rose to ?1,450-1,480 ($2,279-2,325) per tonne from ?1,430-1,450 previously, while LM6/LM25 gravity diecasting ingot rose to ?1,670-1,700 per tonne from ?1,640-1,670.
“We’ve seen a big increase in sterling prices in Europe,” a producer said.
“Since December the exchange rate has gone up by about 6%, meaning prices have risen by about ?60-70 per tonne. We’re now getting European prices not hugely dissimilar to UK prices, so it’s pushing the domestic prices up.”
With demand levels broadly similar, the exchange rate movements have been solely responsible for climbing prices in recent weeks.
“It’s all on the euro – if it falls back to €1.25 [to the sterling] it’s all doom and gloom again,” the producer said.
Scrap prices were broadly stable, though several grades saw increases or a narrowing as lower prices ceased to be reported
Group 1 99% & litho and clean HE9 extrusions both narrowed to ?1,120-1,150 per tonne from ?1,100-1,150 previously; commercial pure cuttings rose to ?1,020-1,060 per tonne from ?1,000-1,050; loose old rolled reached ?770-820 per tonne from ?750-800; baled old rolled rose to ?900-940 from 880-920; and commercial turnings narrowed to ?670-700 per tonne from ?650-700.
London Metal Exchange prices have been volatile, and are providing little direction to scrap sellers.
“The LME has little perks and then comes back,” a scrap dealer said.
“Group 1 looks undervalued now, but by the end of the day it may not. Demand is good, but we’re not getting the overall prices we’d like.”
Buyers expect a reaction to rising ingot prices from the scrap side in the next week or two.
“There’s not a huge amount happening on scrap, but it will start following the ingot,” a scrap buyer said.
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