Non-Ferrous Scrap Metal Market Review: CPI Impact, Geopolitical Concerns, and Industry Expansion

Anticipation surrounding the Consumer Price Index (CPI) and a weakened dollar initially spurred a modest market rally. However, when the CPI figures met expectations, with a 0.4% increase from the previous month and a 3.2% rise from the previous year, most markets stabilized. LME aluminum 3M started the day at $2,200/mt, but it ended the day slightly down at $2218.65/mt. The spread for LME cash to 3m was at 46.35, tightening the spread by 18.65 since last Friday. May Comex copper closed Friday at $3.8915/lb, showing a 4-cent increase for the week and maintaining stability at $3.9325/lb.

As temperatures rise, scrap yards are gaining momentum, but the influx of metal remains insufficient to alleviate buyer concerns. Aluminum scrap prices remain stagnant, with copper scrap expected to do the same. The American Copper Council (ACC) conference is underway this week, contributing to industry dialogue amidst an otherwise tranquil start to the week.

Concerns are still looming regarding aluminum, particularly due to the potential Russian aluminum ban, which could lead to a shortage of aluminum manufacturing in Europe. While the UK has already imposed a ban, the European Union has left it to member states to decide on self-sanctioning. Given that the Middle East is the primary supplier to the region, further European countries following the UK’s lead could pose challenges for Europe, potentially leading to higher LME prices. Consequently, this would impact the Midwest US Transaction Premium, forcing aluminum scrap prices to rise.

Additionally, there are worries in China regarding aluminum. Despite 2023 being China’s peak production year, concerns are growing due to the property crisis affecting supply and demand in metals. Moody’s downgrade of China’s second-largest property developer further unsettled the market.

In other news, DCC Metal Recycling is expanding its shred and recycling facilities to Dillon, SC, marking its seventh location. Expected to open in Q1 of 2025, the facility will be strategically located three miles from Inland Port Dillon, owned by SC Ports. Proximity to the rail port will enhance the facility’s competitiveness in exports, offering quicker, more reliable, and cost-efficient transportation compared to trucking. Established in 1943, DCC operates primarily from its facility in Holly Hill, with feeder locations in Conway, Ladson, Sellier, Hemingway, and St. Matthews SC. Plans for further expansion of feeder locations are reportedly underway.