US A380.1 secondary aluminium alloy price, Nasaac rise to nearly 6½-year highs

The benchmark A380.1 secondary aluminium alloy price and the London Metal Exchange’s North American special aluminium alloy contract (Nasaac) spiked to more than six-year highs, supported by healthy demand even as a semiconductor chip shortage disrupts automotive supply chains.

Fastmarkets assessed aluminium alloy A380.1, delivered Midwest at $1.10-1.11 per lb on Thursday February 25, up 2.31% from $1.07-1.09 per lb on February 18. The price is now at its highest since it stood in the same range in late September and early October 2014.

Similarly, the LME’s cash Nasaac closed the official session at at $2,237.50 per tonne ($1.01 per lb) on Friday February 26, its highest official close since $2,280 per tonne ($1.03 per lb) in early September 2014.

“[Nasaac] is only going higher as there are very few loads of ingot left in the exchange that are not carrying a 10% duty upon possession,” one secondary ingot producer said.

Some secondary ingot producers said there was no visible impact to their demand from the semiconductor chip shortage, while others said only some original equipment manufacturers (OEMs) had been affected.

“In general I am still incredibly bullish and don’t see any downside factors to the market other than the chip issue… no impact yet, but we keep hearing it is on the horizon,” the producer said.

“The semiconductor impact is being felt, but it varies by OEM. Some have [supply] and some don’t,” according to a second producer.

General Motors – which has three vehicle plants in North America idled because of the chip shortage – in late February announced over 160 indefinite layoffs at its Flint Engine operations in Michigan related to the chip shortage.

Meanwhile, market participants were still grappling with freight issues – such as delayed deliveries and elevated trucking rates – brought on by severe winter storms in recent weeks.

Prices for A360.1 and A413.1 also inched higher on Thursday, but 319.1 and 356.1 prices maintained their ranges.

Fastmarkets assessed aluminium alloy A360.1, delivered Midwest and aluminium alloy A413.1, delivered Midwest at $1.14-1.16 per lb and $1.15-1.17 per lb respectively on February 25, each up by a penny from $1.13-1.15 per lb and $1.14-1.16 per lb previously.

The secondary alloy prices were supported by higher silicon costs; in particular, silicon is a large component of A413.1.

Fastmarkets assessed the price for silicon, ddp US at $1.23-1.30 per lb on February 25, up by 2.02% from $1.20-1.28 per lb on February 18.

Fastmarkets assessed aluminium alloy 319.1, delivered Midwest and aluminium alloy 356.1, delivered Midwest at $1.12-1.14 per lb and $1.15-1.18 per lb respectively on February 25, unchanged week on week.

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