Quiet Times

The summer has not been kind to most nonferrous metals. As the summer temperatures rise, nonferrous markets have faced downward price pressures. One of the most problematic metals continues to be aluminum, with several vendors saying orders are harder to come by.

The metal, which enjoyed a bit of a rebirth earlier this year, has stumbled as of late. Prices for aluminum have been languishing during the past several months. Recent reports find prices for aluminum falling to levels near two-year lows. Aluminum prices saw a small bounce after crossing the low, but there are few signs of strength. “Aluminum prices are low, low, low,” one aluminum broker says.

Consumers of aluminum scrap say they are not in any mood to kick things off with larger orders. One Midwestern scrap metal recycler says that while consuming companies are hungry for metal, they are unwilling to pay higher prices and are content to wait for better prices before they commit to larger orders.

On the supply side, scrap metal dealers are reluctant to sell much at present prices and more say they are instead holding on to material in anticipation of higher prices.

Adding to the desultory environment for many metals have been recent declines in manufacturing indexes. With a potential downturn in manufacturing, it is less likely that there will be a surge in orders for finished aluminum through the third quarter of this year.

Also working to suppress prices has been the stronger U.S. dollar, which is putting a damper on exports of many nonferrous commodities. With a more valuable dollar, material from the U.S. becomes more expensive for many offshore buyers.

A number of scrap metal recyclers, however, say the automotive market appears to be strong, underpinning some demand for scrap.

Prices on the London Metal Exchange (LME) are still terrible, an aluminum scrap dealer on the East Coast says. Another recycler says finished aluminum inventories have been increasing. “I think aluminum could be overpriced,” he says.

Recent reports note that finished aluminum inventories have soared and that finished aluminum product prices have dropped by as much as 20 percent.

Although not as problematic as aluminum, copper markets are not in much better shape. While copper scrap prices remain volatile, most scrap dealers contacted say the overall bias is toward the downside.

“It is becoming more difficult to move material,” one copper scrap dealer says. Prices are between $3.23 and $3.50 per pound, he adds.

Recent figures from China show the country’s copper imports dropped by more than 17 percent in June 2012 from the prior month. According to Reuters, the sharp drop is not as bad as it looks. May’s copper import figures were up 12 percent, and June’s import total was close to that of April 2012.

A significant turnaround in the copper market is unlikely in the near term, as copper tube demand, a large consuming market for copper, typically cools off toward the end of the summer.

(More information on nonferrous metal markets, including consuming industry reports and breaking news, is available at www.RecyclingToday.com.)