“The problem is the most hazardous carbon emitting [part of manganese alloy production] is the use of coal or coke [reductants],” Kumar said.

But there are several things that can be done to make production greener, he added, with AML planning to secure land in Malaysia to grow new forests to create biocarbon reductants in the form of charcoal and wood chips.

Kumar added that producer AML plans to source 40% of its carbon reductant needs from those new forests for its Pertama ferro-alloys plant in Sarawak, Malaysia to drastically reduce carbon emissions.

Fowkes pointed out that many of the green measures producers can take up have trade-offs, with biocarbon reductants said to be less efficient and therefore more expensive. As well as there being issues with supply.

“There would be no tree left in the world if everyone is using charcoal,” Fowkes said.

Access to green energy was also a large factor in reducing emissions, with producers operating in countries such as Malaysia, Norway, Iceland and Brazil having the advantage of access to hydroelectric power.

Project Blue founder Beddar said “a lot can be done to improve emissions as a whole” but described complete eradication as “impossible”. Project Blue provides consultancy on critical materials for energy transition.

Other methods discussed to achieve greener production included switching diesel-run equipment to electric-operated machinery, waste heat recovery processes and carbon capture.

However, panelists stressed the need for government subsidies to support greener production across the manganese chain.

Emerging EV end market

The experts also discussed expected demand and supply for manganese sulfate for use in electric vehicle (EV) batteries. While manganese sulfate supply is expected to grow significantly in the next two decades, the manganese industry will still be heavily dominated by alloy production for use in steelmaking, Fastmarkets heard.

Panelists also considered the role of India in the supply chain, with all in agreement that India’s steel market will grow and thus demand for manganese alloys and ore, “but not to extent China has grown”.

The post Challenges, opportunities for greener manganese alloy production: IFA 2023 appeared first on Fastmarkets.

The Trend Indicator has rebounded into bullish territory, at 61.4 for November compared with a resolutely bearish 45.6 in October. This month’s indicator is at its highest since March’s outlook, when it was 65.2. The Outlook’s prediction model allows for an average month-on-month price increase of 5.1%.

Respondents to the Outlook survey were fairly evenly split on the trajectory that scrap prices may take in November. A slight majority – 42.11% – anticipate that prices will move higher month on month, with 40.35% expecting prices to trend sideways over the period. Just shy of a third of those surveyed – 31.58% –  attribute this expectation to increased demand for scrap. Meanwhile, 39.29% of respondents believe inventories will be unchanged in November, with a matching 39.29% seeing them lower.

Respondents still expect prime scrap grades to outperform their cut and shredded counterparts over the next three months. The tentative resolution of the United Auto Workers’ strike – culminating with the third of the Detroit “Big Three” automakers, General Motors, agreeing to terms on Monday October 30 – should loosen prime availability in the longer term.

Generation of those grades was dampened by a dearth of stamping activity amid the strike and will take time to recover, bolstering prospects for prime pricing next month. Recovering finished steel demand from automotive post-resolution is a further boon for scrap demand in the longer term.

Market participants see the potential for a minimum $20-per-gross-ton increase on prime grades in November. Two major US hot-rolled coil producers increased base prices to $900 per ton at the end of October, and this may stymie any potential drop in raw materials prices.

Demand drivers and steel market outlook

Demand for the coveted HRC feedstock is expected to increase over the period, with only four HRC mill outages slated for November compared with 11 in October, per Fastmarkets’ estimates. Higher pig iron prices, now assessed at $450 per tonne CFR Gulf for large tonnage, may also switch mills’ preference to prime scrap, which was assessed at $400 per ton in the benchmark Chicago market in October.

Export volumes booked by the United States’ biggest customer, Turkey, lag those of September by only two cargoes, with the region securing 10 US-origin cargoes despite lackluster rebar demand exacerbated by the Israel-Hamas war. Turkish mills are reportedly operating hand to mouth amid low supply, and they were forced to re-enter the US market at an increase in a cargo deal heard on Tuesday October 31.

Confidence in market direction has surged to 61% in November compared with 56% in October, suggesting that participants are increasingly aligned in their view that the market is showing strength.

Make sense of the US steel scrap market and track the critical indicators impacting steel scrap price movements in our latest outlook.

The post US Scrap Trends Outlook: November appeared first on Fastmarkets.

In 2023, the freight cocktail causing the nasty taste in market participants’ mouths has been created by a combination of high oil costs, record Brazilian grain exports and an unprecedented drought in the Panama Canal.

The Baltic Exchange’s main dry bulk sea freight index jumped to its highest level in over 11 months on Tuesday October 3 due to strong demand for capesize ships, while the exchange’s capesize index reached a high not seen in more than nine months on the same day.

Fastmarkets’ average freight rate for a 52,000-tonne vessel sailing from Port Elizabeth in South Africa to Tianjin port in China, with one stop in between, was $29.30 per tonne on September 29, unchanged week on week but up by $6.20 per tonne from $23.10 per tonne on August 4.

Costs for shipping a 20ft container of scrap metal from the United Kingdom with a well-known line rose by $100 per container to the west coast of India in October and by $150 per box to the south and southeast of India, according to a major UK-based exporter source. A second UK-based exporter said their costs from the UK to India rose by $125 per container for October sailing – equivalent to around $5-6 per tonne of ferrous or non-ferrous scrap.

Freight rates for handysize vessels carrying 30,000-32,000 tonnes of ferrous scrap from the US West Coast to Bangladesh were heard around $59-60 per tonne this month, up from $51-52 per tonne two months prior. A Singapore-based trader said they had seen freight increases of “generally 10-20%” in October on the routes they track, which includes trade in bulk from Japan to East Asia.

On the East Coast-Turkey handysize route, ocean freight rates were heard at $35-38 per tonne on Wednesday October 4, which was up sharply from $32-33 per tonne in early September and $22-24 per tonne in August. But the rates were down from above $40 per tonne last week, according to market sources.

The slight decrease in bulk ocean freight rates in the last week follows a drop in oil prices from their peak levels in late September. It begs the question of whether this year’s spike in freight rates in some areas will be short-lived or if it will continue in the coming weeks.

And not all popular scrap trade routes have increased. The Australia-Bangladesh scrap route in containers was heard to be stable with even some downward pressure, due to a lack of container trade coming out of China around Golden Week holidays.

Market impact

Manganese ore producers moving material from South Africa to China said higher freight rates this summer have put miners under further cost pressures, with high supply of the product pushing down ore prices in recent months and adding to already tight profit margins.

However, one manganese ore producer said the elevated freight rates had supported a slight upward movement in market levels in the past two weeks by increasing the cost of production for the material. They added that in late September they had even pulled an offer for a vessel sailing the following month due to costly freight rates.

Fastmarkets’ weekly manganese ore index 37% Mn, cif Tianjin was calculated at $3.58 per dmtu on September 29, up 3 cents per dmtu from $3.55 per dmtu on two weeks earlier.

In ferrous scrap, the rising freight costs mean that selling material on longer-haul routes, such as from the UK to Bangladesh, is becoming more difficult.

Due to the higher freight costs, transactions from the UK to Bangladesh now require a premium of at least $25-28 per tonne over the CIF India scrap price for UK material, according to an Indian seller source. This would make selling material to Bangladesh less likely, the source said.

With the higher freight costs in addition to poor demand in Bangladesh and Pakistan, India has been inundated with offers for containerized scrap over the last few weeks, sources told Fastmarkets, pushing down prices in that market.

Fastmarkets’ calculation of the containerized steel scrap shredded index, import, cfr Nhava Sheva, India was $421.25 per tonne on Tuesday, compared with $425.56 per tonne one week before and $434.50 per tonne two weeks before.

These decreases in export prices, in addition to increased freight costs, have squeezed scrap generators from regions like the UK, meaning there are expectations of lower prices for shredder feed soon, a major UK scrap processor said on Friday September 29.

“[Light iron shredder feed] should have come down with increased freight rates in containers and UK steelworks indicating drops [for the monthly scrap purchase market in] October, however volume is limited and this is keeping prices artificially high,” the processor said.

“The market will need a large downward price correction at some point once stability returns, as [UK light iron] is grossly overpriced at the upper end of the range,” the source added.

Oil costs

Freight rate increases have been underpinned by the rise in oil costs following supply cuts from major producers such as Russia and Saudi Arabia, according to shipbrokers Intermodel.

Brent Crude oil futures rose considerably in recent months, from $71.17 per barrel on June 12 to $93.50 on September 27. Since then, there has been a correction in prices, with the benchmark indicator down to $87.71 per barrel at the end of trading on October 4.

Supply reductions announced by Saudi Arabia and Russia are expected to continue shaping oil prices throughout the year but “the prospect of oil reaching the $100 per barrel mark may be short-lived amidst the current supply constraints and the fragile state of the overall economic environment,” Intermodal said on October 3.

Scrap market participants surveyed by Fastmarkets on Thursday October 5, expected oil prices to remain elevated, and for this to be a major reason for freight rates to remain higher than earlier in the year.

“The only variable in our trading right now is container freight, and we think it will go up again in November. This is due to the oil cost but also because, generally, after the Diwali festival period in India, there is lots of buying activity,” the major UK-based scrap exporter said on Thursday.

Panama Canal drought

Drought in the Panama Canal has also added to issues faced by market participants this summer, raising freight costs further.

An extended dry season over the summer and an El Nino weather event have led to water levels in Gatun Lake, which provides vital freshwater for the country of Panama, as well as the 80 kilometer-long canal, reaching lows not seen since 2016.

Since each vessel transiting the waterway displaces millions of gallons of water from the lake, the canal authority says it has been implementing procedures to save water, including the reduction of the number of vessels passing through the canal.

These measures to manage operations and save water in the Panama Canal led to “vessel congestion, [meaning] less vessels in the market as they are stuck in the canal and can’t deliver goods or offload them and be back in the market to load,” a freight source told Fastmarkets.

In September, the average days in queue for a northbound vessel without a reservation peaked at seven days, with a maximum wait of 15.8 days on September 19. Southbound September vessels peaked at an average of seven days, with a maximum of 13.3 days on September 29.

Non-booked Northbound vessels heading towards the Atlantic Ocean had an average waiting time of three days on October 4, while non-booked Southbound vessels en route to the Pacific Ocean had wait times of 5.6 days.

While canal authorities have announced that the number of vessels waiting is now below last year’s level at the same time, Fastmarkets has heard from market participants that the disruption has led to some vessels taking alternate routes with longer lead times to avoid the canal entirely. This can lead to congestion popping up at other places in the world.

Measures will be maintained into and throughout 2024, “unless weather conditions change significantly from current forecasts,” with vessels without reservations mainly impacted, according to the waterway’s authorities.

Soybean exports

Another factor contributing to heightened freight rates due to lesser availability of vessels has been the high demand for Brazilian grain exports, leading to a greater number of vessels needed to fulfill demand.

Soybean exports from Brazil reached 6.4 million tonnes in September, while corn shipments totaled 8.7 million tonnes, both record volumes from the country in that month, Fastmarkets reported on October 3.

Soybean shipments have risen sharply amid huge demand from China and a drought in Argentina, meaning the South American nation has had to supplement its crushing demand with Brazil-origin imports.

Soybean shipments per working day averaged 383,990 tonnes in August, up 48.5% year on year, and corn exports averaged 373,204 tonnes per working day in the same month, up 15.2% from 323,743 tonnes the year before.

Demand for the grain is expected to remain high until the end of the year, with a record number of exports forecast by consultancy firms.

Declan Conway in Galway, Cem Turken in Mugla, and Amy Hinton in Pittsburgh, contributed to this story.

Follow all the latest LME Week insights by visiting our dedicated content hub.

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Negative sentiment brought about by falling US hot-rolled coil prices and consternation regarding the ongoing United Autoworkers union strike is outweighing any benefits from decent raw materials demand and a healthy export market ahead of October’s ferrous scrap trade, Fastmarkets understands.

The Trend Indicator has once more retreated into bearish territory, with a reading of 45.6 for October compared with 61.3 in September. This month’s indicator is at its lowest since it was 39.4 in July. The Outlook’s prediction model allows for an average month-on-month price decrease of 3.1%.

A majority of respondents to this month’s survey – 43.14% – anticipate that scrap prices will be lower in October, while 37.25% of those surveyed expect prices to trend sideways. Just over half of those surveyed – 52.94% – attribute their expectation for lower prices to decreased demand for scrap. Scrap inventories will remain unchanged, according to 50.98% of survey participants.

More bullish 3-6 month outlook for steel scrap

There are marginally bullish market prognoses for the onset of 2024, with 54.90% of respondents believing that prices will be higher three months after the October trade. A whopping 74% feel that scrap prices will be higher for the second half of 2024 than current levels.

Prime scrap grades are expected to outperform other grades over the course of the next three months, according to 44.90% of respondents, with 38.78% believing that cut grades will perform best. Only 14.28% feel shredded scrap will have the strongest performance. This assessment comes after cuts and shred trended sideways in September, while prime grades were subject to cuts of up to $50 per gross ton.

Pre-trade chatter points to potential price declines, particularly for prime grades, in October amid a slew of flat-rolled mill outages then. Shredded scrap prices also could fall.

Export volumes to the US biggest customer, Turkey, have been extremely healthy in September despite negligible price movements over the period. Steel mills there have bought a reported 12 cargoes of obsolete grades; this would normally tighten the domestic market, but it may not be sufficient to outweigh negative factors at home.

Confidence in market direction continues to erode, with overall trend consensus dropping to 56% for October from 59% in September and 63% in August.

Make sense of the US steel scrap market and track the critical indicators impacting steel scrap price movements in our latest outlook.

The post US Scrap Trends Outlook: October appeared first on Fastmarkets.

The expansion will add initial recycling capacity of up to 120 million lbs per year to feed recycled billet and sheet ingot production.

Recycled used beverage cans (UBCs) and other end-of-life aluminium products will be used to produce sheet ingot – high purity aluminium slabs that are used as feedstock for rolling mills, the company said.

Aluminium billet is used as raw material for extruders, whose primary end-use markets are construction and automotive.

Spectro Alloys president, Luke Palen, highlighted the project’s broader goal of advancing recycling in Minnesota by locally producing valuable aluminium materials.

“This investment isn’t just about adding jobs and producing more, it’s about helping Minnesota as a whole become better at recycling by creating an extremely valuable type of aluminum that manufacturers need,” he said. “It is about closing the loop for locally sourced materials – ensuring the value in aluminum products we use every day supports responsible recycling of aluminum right here in Minnesota.”

The announcement follows the company’s November debut of a new distribution center for shipping and processing finished products. The new distribution center aims to streamline the production, shipping and receiving processes to provide recycled aluminium ingots to regional die casters and foundries.

The announcement, however, comes amid soft US demand for aluminium, with spot trading remaining sluggish and consumers well-stocked.

Scrap sources have been reporting stable prices and a lack of activity, particularly over the summer months, describing the market as “lackluster.”

Sources have also noted depressed activity ahead of and during the United Auto Workers (UAW) strikes. The ongoing UAW strike in the automotive industry has added uncertainty to the market, and while some competitive sales were reported, sources do not anticipate that aluminium premiums will fall below the current range due to thin trading

One source said that market participants are “waiting for the other shoe to drop,” and for some consensus on the market’s direction.

Despite this, UBC prices have remained largely on par with 2022 levels.

Fastmarkets’ assessment of aluminum scrap used beverage cans, domestic aluminum producer buying price, fob shipping point US, was last assessed at 66-70 cents per lb September 14, up slightly from 65-69 cents per lb on September 7, but down slightly from 72-76 cents per lb on September 15, 2022.

Meanwhile, Fastmarkets’ assessment of the aluminium P1020A premium, ddp Midwest US was at 19-20 cents per lb on Tuesday September 19, unchanged from September 5.

Fastmarkets last assessment for aluminum 6063 extrusion billet premium, delivered Midwest US, however dropped 9.09% at 9-11 cents per lb on September 8 from 10-12 cents per lb on August 25.

Kirstyn Petras in New York City contributed to this story.

The post Spectro Alloys boosts capabilities with recycling expansion project appeared first on Fastmarkets.

A resurgence in deep-sea ferrous scrap exports in August and the gradual abatement of the summer doldrums, along with tight supply, are giving rise to growing bullish sentiment for the September US ferrous trade.

The Trend Indicator continues to escalate into increasingly bullish territory, at 61.3 in September versus 52.2 in August. The Trend Indicator was a significantly more bearish 39.4 in July. The Outlook’s prediction model allows for an average month-on-month price increase of 6.7%. Learn more.

Just over half of survey respondents – 52.83% – expect prices to rise month on month in the upcoming trade, with a majority – 35.85% – attributing this potential increase to lower scrap supply. Among respondents, 30.19% believe that scrap will trade sideways in September.

Over half of participants are taking a similarly bullish forward view of the US ferrous scrap market, with 59.62% and 59.40% saying that prices will continue to move higher over the next three and six months respectively.

Exactly 50% of participants believe that cut scrap grades will be the best performing over the next three months, while 38.46% gave the nod to prime grades.

Pre-trade chatter alludes to potential September increases of $10-20 per gross ton for cut scrap, specifically heavy melt and plate and structural, amid tight flows of material and a resurgence in export activity. Learn more.

New direction for steel prime scrap grades

Opinions have changed regarding the direction prime scrap grades will take.  Some now suggest that prices may be pushed lower while mills look to increase the spread between busheling and hot-rolled coil, with prices for the latter having moved progressively lower.  A slew of HRC mill maintenance outages is exacerbating the situation.

The market is eyeing the mills’ negotiations with the United Auto Workers, the outcomes of which are slated for mid-September; halted vehicle stamping could increase mills’ reliance on shredded material in HRC production amid reduced prime generation.

Confidence in market direction has dipped, with overall trend consensus for September dropping to 59% from 63% in August and 60% in July.

Make sense of the US steel scrap market and track the critical indicators impacting steel scrap price movements in our latest outlook.

The post US Scrap Trends Outlook: September appeared first on Fastmarkets.

Fastmarkets on Thursday launched two new price assessments for the secondary aluminium market. The inaugural price assessments for aluminium pressure diecasting ingot DIN230, delivered Europe, and aluminium pressure diecasting ingot DIN239, delivered Europe, stood at €2,500-2,580 ($2,710-2,797) and €2,400-2,475 per tonne on Friday.

Both of the new grades are used in the automotive industry in applications such as boxes to house batteries used in electric cars, a growth industry for producers of such components. The grades are also used in chassis components, engine mounts and air springs in car manufacturing. The newly assessed grades are also used in chair frames, home appliances such as refrigerators, washing machines, dishwashers, dryers and televisions, as well as air conditioning units.

Ingot DIN 230 has more silicon content compared with its sister grade DIN 239, with the former containing 10.5-13% Si, compared with 9-11% in the latter, meaning DIN 230 grade is usually slightly more expensive. The bulk of secondary aluminium ingot production in total in Europe is DIN 226 grade and the overwhelming majority of that production is pressure diecasting material.

In terms of the new additions to Fastmarkets-assessed European grades, however, DIN 230 and DIN 239 are only slightly more made as pressure diecasting material in terms of volume than sand diecasting material. Sand casting leaves a rougher finish to the surface of manufactured parts, with material containing 0.4% iron and 0.3% copper, compared with 1% iron and 0.8% copper in pressure diecasting material.

“The ingot markets are rather quiet; all participants are waiting for September to bring some clearer outlook for price direction,” a European producer source said.

“But in our view, the market situation will only worsen due to ingot producers’ overcapacity, problems of smelters to cover their capacity, and the low inflow of scrap,” the producer source added.

“Everyone in the secondary aluminium business is really nervous about the fourth quarter as car sales will dramatically slow down,” a second producer source said.

“We are really pessimistic about the [European] ingot market after October. However, the scrap inflow continues to go down in Scandinavia, so that means less [ingot] supply. Our inflows of aluminium scrap are down about 15% in the past two months, which is severe,” the second producer added.

Some market participants said that the backlog of new orders for cars, a key area for secondary aluminium consumption, should be met in the next couple of months.

But it is customer orders for new cars after October and into early 2024 that is worrying metals producers; probably as a result of the lagging effect on the economy of strengthening interest rates and its impact on consumer spending. That effect, combined with energy costs, currency moves and the worry that heavy job losses may be inevitable at some point in the coming months is dragging on market sentiment for business conditions in the coming months.

Moreover, credit lines for both heavy industry and customers are also a worry, all of which raises the prospect of production cuts and shutdowns in the coming months, and there has already been remedial action to mitigate against weakening demand this year, with some smelters cutting production, participants said.

While one or two market participants said that original equipment manufacturers (OEMs) have been busy this quarter, the weight of market opinion suggested that OEMs have been shut this month – which last happened in the economic downturns of Covid-19 and the financial and economic slumps of 2008-2010 in the West.

An OEM is a company that makes and sells products, or parts of a product, that their buyer, another company, sells to its own customers while putting the products under its own branding. So a secondary aluminium producer will make such a product and sell them to a customer, which in turn will sell that product to its customer, such as a carmaker.

According to some secondary aluminium participants, OEMs are satisfied with at least half of their raw materials intake for September, with a negative outlook for the next quarter and beyond, they said.

Weakening scrap prices weighing on ingot

While market participants said that weakening scrap prices have been weighing on ingot prices, recent price weakness has yet to substantially knock secondary aluminium markets, although that may change if scrap price weakness persists in the near term.

Scrap export demand from Europe has also been relatively low key, with traditional export destinations in the Far East quieter than usual as Chinese and Japanese markets have opted to use more of their own ingot and scrap production than usual this quarter. Still, Taiwan and South Korea have been buying some loads from Europe recently, sources said.

Fastmarkets assessed the price for aluminium scrap floated frag, delivered consumer Europe, at €1,500-1,550 per tonne on Friday, narrowing downward by €50 per tonne from €1,500-1,600 per tonne on August 18. The market was as high as €1,680-1,780 per tonne through most of February.

“We are very pessimistic about market conditions in September and there is only hope for improvement in October,” a third ingot producer source said.

“After completing the backlog of new car orders from Covid there is little demand for new cars given the current economic conditions, and that extends to all areas as consumers are tightening their budgets a lot,” the third producer source said.

The post European secondary aluminium prices steady, scrap under pressure appeared first on Fastmarkets.

Steel scrap prices will walk the line between tight supply and low demand to potentially sideways pricing in August’s monthly trade, with lackluster fundamentals failing to pick prices up from what many view as the market bottom.

The Trend Indicator has tipped into very moderate bullish territory with a reading of 52.2 for the month versus a significantly more bearish 39.4 posting in July. The Outlook’s prediction model allows for an average month-on-month price increase of 2%.

Half of those surveyed expect steel scrap prices to remain unchanged in August, with an equal majority of participants –31.58% – attributing this expectation to unchanged market fundamentals and lower supply, respectively. A lesser 22.81% of respondents pointed to lower demand as the driving factor behind next month’s price move.

Cuts scrap grades to rise in August

Cut scrap grades are trailing slightly behind the touted top performer primes (47.34%), with 36.84% of participants believing they will be the best-performing grades in August. Heavy melting scrap in particular, has been in the crosshairs for an increase of as much as $20 per gross ton next month in some markets, with sources suggesting that prices for that grade cannot go any lower.

This is despite progressively lower export deals made to Turkey over the course of July; a tally of seven spot sales have been concluded at a $27-per-tonne decrease over the course of the month for an 80:20 mix of No1 and No2 heavy melting scrap.

Shredded scrap is once again less desirable than its cut and prime counterparts despite reports that shredders in certain parts of the US have been forced to raise scale prices to increase inflows into yards amid exceptionally tight supply of the grade.

Spot activity for hot-rolled coil remains muted, limiting upside for primes and shred despite weak flows. Overall trend consensus remains little changed, up to 63% in August from 60% in July. Learn more.

Make sense of the US steel scrap market and track the critical indicators impacting steel scrap price movements in our latest outlook.

The post US Scrap Trends Outlook: August appeared first on Fastmarkets.

SDI’s chief executive officer Mark Millett said during the company’s second-quarter earnings call on Thursday, July 20, that he believes that buyers “panicked” in 2022 and loaded up on can inventories, much of which still has yet to be used. But given consumers’ sustainability-driven shift away from the use of plastic packaging for bottled water and other fluids, by the time the Columbus mill comes online in mid-2025, any excess inventory will have cleared.

“In all honesty, when our mill comes up, I think that the marketplace is going to be in a beautiful place for us to receive from,” Millet said.

There have been signs of short-term bearishness in the aluminium can market demand, with weaker demand weighing on the first-quarter earnings of aluminium producer Constellium, which shipped fewer cans and specialty-rolled products.

In addition, Ball Corporation plans to close its Wallkill, New York, beverage packing facility on August 31, the company confirmed to Fastmarkets on June 2. The company has also closed facilities in Phoenix, Arizona, and St Paul, Minnesota, in the past year and said it will delay the construction of a new plant in North Las Vegas, Nevada.

Aluminium market demand

In addition to investments by SDI and Ball, MetalX and Manna Capital Partners said in April that they will invest $200 million to build a 100,000 tonnes per year ultra-low-carbon aluminium rolling slab mill in the US Midwest, which is scheduled to come online by the first half of 2026.

In July 2022, SDI announced it would spend around $2.2 billion, which has since been upgraded to $2.5 billion, on the Columbus facility and two remote recycling plants to help feed it.

The company remains bullish on the can sector’s promise in the long term, Millett said. He added that while he didn’t share in post-Covid-19 projections that aluminium demand would be sufficient enough to support multiple new US mills, his company believes that automotive and beverage growth will continue apace.

“We certainly feel there’s more space to satisfy our market share,” he said.

Export demand for US used beverage cans (UBCs) has grown since SDI’s investment announcement. From January-May 2023, exports of UBCs rose 7.77% to 199,493 short tons, while imports decreased 5.01% to 86,525 tons year on year.

Prices for UBCs, however, have declined significantly since March 2022. Fastmarkets’ aluminium scrap used beverage cans, domestic aluminium producer buying price, fob shipping point US hit a high of $1.32-1.35 per lb on March 31, 2022, but fell to $0.73-78 per lb in July 2022. The price was last assessed at $0.66-0.70 per lb on July 20.

Impact on scrap and aluminium markets

In addition to steelmaking, SDI is one of the US’ largest metal recyclers, producing approximately 5.3 million gross tons of ferrous scrap and 1.054 billion lbs of non-ferrous scrap in 2022. The company produced 1.52 million gross tons of ferrous scrap in the second quarter of 2023, a 12% increase year on year, with nearly 580,000 gross tons shipped externally. The company’s average ferrous scrap cost per ton melted at its steel mills rose by $31 per ton to $444 per ton in the second quarter compared with the first quarter of 2023, the company said.

At the same time, SDI produced 280 million lbs of non-ferrous scrap during the second quarter, a 5% increase year on year.

Millett said that he expects scrap prices to “fluctuate modestly” during the rest of 2023, and anticipates a seasonal rise in the third quarter. He predicts the market could see some “moderating again” in the fourth quarter.

Kirstyn Petras in New York City contributed to this story

Stay ahead of the curve with our market-reflective aluminium price data, including hundreds of price charts for aluminium scrap to low carbon aluminium prices. Learn more.

The post Aluminium can inventory surplus will clear by 2025: SDI CEO appeared first on Fastmarkets.

Traditional summer production slowdowns and a dearth of robust export options are expected to enact further downward pressure on the US steel scrap market in July, marking a potential third consecutive month of steel scrap price drops across all grades.

Despite the Trend Indicator rebounding marginally to a reading of 39.4 in July compared with a more-bearish posting of 34.4 in June, the outlook’s prediction model still allows for an average price decrease of 7.2% over the period.

Just under half of those surveyed – 48% – deemed that steel scrap prices will be lower in July versus June, though those survey participants anticipating a sideways market over the period – 37% – were hot on their heels.

Outlook for steel scrap prices in July

The majority of participants’ expectation that the market will move lower in July is attributed to weaker scrap demand, according to an equal number of respondents. Exactly half thereof assessed that inventory levels would remain unchanged in July, tipping market fundamentals into weaker territory as a result of this declining demand.

Shredded scrap is once more deigned to be less desirable than cut and prime grades; many US shredders have continued to drop their infeed prices in a sure-fire sign that steel scrap prices for the grade are headed down again. Prime scrap will be the star performer as per 54% of survey respondents with a recent slew of hot-rolled coil increases from US steelmakers likely to stabilize the market for those grades at best.

Overall trend consensus has dropped to 60% in July from 65% in June, suggesting that confidence in the market’s trajectory next month is wavering.

Make sense of the US steel scrap market and track the critical indicators impacting steel scrap price movements in our latest outlook.

The post US Scrap Trends Outlook: July appeared first on Fastmarkets.