Secondary aluminum has been relatively quiet as far as volume. We are getting a lot of mixed reports. The market has tightened up a bit. There is a lot of uncertainty in the market because everyone is anticipating the worst of this whole budget crisis, so a lot of people are afraid to take a step forward until they know what the future holds. We are seeing that people are still buying, working hand and mouth.
Scrap is available. There always seems to be more in the summer due to some of the consumers taking plant shutdowns for plant maintenance and vacation. The Chinese are out there but they are not as aggressive as they were.
Primary scrap is still tight. Premiums are still high. Companies like Novelis have been very aggressive. There seems to be still a strong need for the better grades of scrap. It has been a little bit of struggle for the low grades. Even with the LME going up, the spreads haven’t opened up much.
Fundamentally, there is still going to be a tightness on aluminum worldwide for the rest of the year. Sales are down in the automotive industry, but it may be a seasonal situation.
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Michael Dorfman can be contacted at mdorfman@statemetalindustries.com.
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