Primary Mills Drive Spot Aluminum Scrap Purchases

SEATTLE (Scrap Monster): The primary mills in the Midwest region are seen actively buying aluminum scrap on the spot market as of mid-February. The increased spot-buying activity clearly indicates strong demand for aluminum scrap. It must be noted that the mills used to purchase bulk of their scrap based on contracts.

As per market reports, aluminum scrap is seen getting higher offers even from secondary mills, which indicates robust housing starts and automotive demand.

The automotive production issues on account of semiconductor shortage have impacted not only aluminum producers and scrap metal dealers. The hampered automobile production due to Covid-19 restrictions has led to reduced semiconductor demand. The semiconductor manufacturers have not been able to match production with the high demand resulting from quick recovery in car sales.

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Scrap Metal Industry Rebounds 

The semiconductor shortage has forced many leading automakers to reduce production or temporarily halt plant operations. For instance, Ford had recently announced its decision to reduce production of F-150 trucks by cutting production shifts at various plants across the U.S.

The recent shift in trend to electric vehicles could significantly benefit aluminum sheet producers, though it may cause harm to secondary aluminum producers.