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UK secondary aluminium producers seek scrap

UK secondary aluminium producers are trying to source scrap metal ahead of expected price increases due to tight supply, Metal Bulletin has been told.

"It's hard to get out in front, but we're doing what we can to buy scrap in," one producer said. "Buying scrap now is the right thing to do."

Scrap supply could tighten significantly in the coming weeks, as more ingot producers look for raw material deliveries and as export markets in Asia look for a recovery. Deliveries into India, for example, stopped over the summer on currency issues.

 Tightening supply will lead to higher prices, and producers are now trying to buy material in ahead of those increases.

"We're trying to find scrap now," a second producer said.

 Scrap prices were stable on Wednesday August 28, but buyers expect to be paying higher prices as the fourth quarter draws nearer.

"Next month will be a different story," a third producer said.

 Secondary aluminium ingot prices were also stable on Wednesday, with LM24 pressure diecasting ingot continuing to trade at ?1,520-1,570 per tonne and LM6/LM25 gravity diecasting ingot staying at ?1,720-1,780 per tonne.

 As with scrap, market participants expect higher prices to accompany fourth-quarter demand as supply tightens. Supply in Europe will be without German producer Oetinger's Berlin facility, which has a capacity of about 30,000 tonnes and is closing at the end of this month.

 But activity has so far been minimal, and producers have not yet been able to secure the higher prices.

"There's still no change," a fourth producer said. "A lot of people are still pushing for higher prices, but they haven't come through yet."