I have been selling cast aluminum scrap for over 40 years. Once I even sold 100 tons in a single year. In 2008 aluminum prices crashed relative to all other non-ferrous prices and aluminum prices have never recovered. Nor do I see any reason for them to recover in the for-see-able future. Therefore in most cases there really is no reason to sit on it.
For decades before 2008 I watched aluminum on the London Metal Exchange. During that time the normal amount on hand was something like 1 million tons. In 2008 it jumped to 5 million tons and stayed there for over a decade. Last time I looked it was around 3 million tons. No clue about today, but I doubt that it is any better. Bottom line is that there is SIMPLY TOO MUCH ALUMINUM AVAILABLE and has been for over a decade. No chance of that changing any time soon. And no chance of prices getting much better at all.
In the decades before 2008 I noticed a correlation between #2 steel scrap and aluminum. For over 25 years the ratio was 20:1 (if steel was $50 per ton aluminum was about 50 cents per pound). That ratio held for decades. In 2008 the ratio went to 6:1 ($250 per ton versus 75 cents per pound). Last January local steel was $125 ton and aluminum was at 35 cents per pound, a ratio of 5.6:1. No clue today since the lockdown. Regardless, with aluminum so low I am not even separating out the 50% dirty aluminum any more (and haven't been for over 4 years) - I am just throwing it in the steel scrap.
With so much aluminum available, I see no real upside to aluminum prices for DECADES. Yeah, they might go up some, but every thing else will go up faster.
Bookmarks