Recycled aluminum prices will remain high

By Tom Stundza -- Purchasing, 4/23/2008 9:39:00 AM

Secondary aluminum prices are expected to remain high in 2008 as scrap supplies stay tight, according to several news reports from the recent Institute of Scrap Recycling Industries meeting in Las Vegas. At present, secondary aluminum ingot in die cast alloy 380 costs $1.29/lb this month, up 21% from $1.07 in the year-ago April.

Besides the price, securing adequate scrap supplies will be the greatest challenge for secondary producers, Denny Luma, president and chief operating officer of Superior Aluminum told ISRI, according to a report in the Platts Metals Daily subscription newsletter. “We must be purchasing scrap every day, we must always be out buying,” says Luma. But, this is expected to be difficult as scrap supplies dwindle.

“There is less scrap around,” suggests Norberto Vidana, the procurement and quality assurance manager for Mexico’s Nemak, a maker of aluminum engine blocks and cylinder heads for the automotive sector. “There is clearly less scrap being generated today” because of reduced metalworking activity.