Conditions in the copper and aluminum scrap markets continue to be sluggish, recyclers say, with low prices, a continued lack of consumer demand and uncertain supply conditions affecting both sectors.
Todd Safran, vice president and chief operating officer of Safran Metals, Chicago, says domestic and international consumers of copper scrap presently are restricting their purchases to what they require. In addition, continued LME (London Metal Exchange) price declines for copper in August signal the lackluster conditions could continue.
“We haven’t seen a bottom yet,” Safran says of copper scrap prices. “It’s also been hard to get our hands on scrap.”
Safran says at least some peddlers, recyclers or industrial accounts that do have copper scrap may be waiting for a rebound in copper prices before selling their material.
“It’s not easy to buy at these prices,” he says. “And now, on the selling side, no one’s being too aggressive in wanting the material, so it’s sort of the perfect storm at the moment. And we hear that from everyone.”
Safran says the sluggish conditions in the secondary copper market have been evident for most of the summer. He says this time of the year is historically slower in light of summer shutdowns and maintenance projects; however, the current conditions are worse than usual, he adds.
“Seeing a new six-year low every day makes it that much harder,” Safran says, referring to the fact that the LME price of copper dropped further in August after reaching a six-year low in July of $5,190 per metric ton.
“These are numbers that people haven’t seen in a long time,” he adds.
On the aluminum scrap side, Michael Dorfman, vice president of the secondary aluminum producer State Metal Industries, Camden, New Jersey, says markets are very soft now and an abundance of primary material is available.
Dorfman also says the recent LME warehouse reforms have had a significant impact on the aluminum market.
“There’s been a lot of material available,” he says. “Mills can buy metal and receive it in a reasonable amount of time instead of having to wait a year or so.”
A flood of primary material from the Far East is another factor that has affected aluminum scrap price and demand.