Platts reported that US aluminum scrap export prices have risen in some case 5 to 10 cents per pound over domestic prices on secondary grades and as scrap demand from China has soared over the past few months, this has tightened US supply.

However, as US scrap demand has waned, in line with operating rates of 50% or less in the secondary aluminum alloy industry, the spread between domestic and export prices is widening.

A dealer said that "Our numbers to China rose by 2 to 3 cents since Monday. The Chinese cannot get their hands on enough scrap. And the Chinese are seeking grades up the food chain. They are buying grades we've never sent them before. They really are the only game in town."

The dealer said that he was selling old cast and old sheet to the Chinese at 8 cents above his US prices for those items, 36 cents and 35 cents, respectively. Mill grade MLCCs prices to China were a mere penny above his 45 cents US price. The Platts old cast and old sheet prices were 35 to 37 cents and 34 to 36 cents, respectively, as of March 26th 2009.

Another processor sold dealer 10/10 scrap to China at 48 to 49 cents, while his domestic prices were 44 to 47 cents. He said since the domestic market for old cast and old sheet was so lackluster, dealers were sticking those grades into their zorba packages to China. He added that "In the US secondary market, there's no one to step up to the plate. So with zorba, we throw it in and grind it up. They don't care."

One frustrated smelter scrap buyer who had a hard time finding material said that "The Chinese are being foolish. They are stockpiling. There is no need for the material now, maybe in the future, but not now. Their businesses are shutting, and this is causing a shortage."

Another scrap buyer said he found supplies tight and are being told it's all China. He added that "We are buying scrap, but we are not getting enough. Even with shipping costs, it makes sense for them to import."

(Sourced from www.platts.com)