Scrap aluminum
The price assessment of aluminum scrap depends on several key factors that influence its market value.
Evaluation of aluminum scrap
The evaluation of the price of aluminum scrap depends on several factors, four in particular.
1 – Quotation of the price of primary and secondary aluminum on the London Metal Exchange;
2 – Product category of aluminum scrap in possession and related quality;
3 – Quantity, which affects the number of steps to complete the circular economy, i.e. the loading-unloading, transport and storage costs to be done before completing the cycle and arriving at fusion again;
4 – Distance between the storage point and the destination site of the material and consequent transport costs.
5 – Request at that specific moment from the foundry or trader based on their sales contracts.
The first factor affecting the price of aluminum scrap is the listing that is made on the London Metal Exchange.
The price quotation of aluminum on the London Metal Exchange is in turn based on real market demands, global inventory levels and speculation.
The most important pricing factor always remains the demand for semi-finished products, which indicate the quantity of demand and the value of consumption on the market. The semi-finished products leave the foundries and are destined for manufacturing industries, which require semi-finished products in aluminum for the production of a multitude of objects, from home furniture to the naval and aerospace industries, and for a myriad of mechanical components, created especially for the construction and automotive markets.
Therefore also on the basis of global consumption trends of objects of daily use, to the relationship between supply and demand and therefore to the relative request made by the manufacturing industry of semi-finished aluminum there are fluctuations in the price of aluminum on the stock markets.
THE SUBJECTS OF THE SUPPLY CHAIN
Recovery industry
Foundries and Distributors
Manufacturing industry
To evaluate the price of scrap aluminum it is necessary to take into consideration other factors.
First of all, the quantity and the quality of the material must be evaluated, then its commercial category.
Aluminum scrap is the sector with the most commercial categories among scrap metal.
The main macro-categories are: aluminum profile, aluminum casing and aluminum sheet.
In addition obviously to the type of alloy and chemical analysis which can vary each time, the fundamental aspect with which the quality of aluminum scrap is evaluated is how much impurity, therefore the percentage of foreign material is found in a given load.
Each company can decide based on its structure and sources of supply he:
1 – have higher internal costs for cleaning, selection, then separation into homogeneous alloys of the aluminum scrap that is available, to then have greater quality and a better selling price;
2 – or have lower selection and sorting costs obtaining less specific categories and consequently a lower selling price.
Another factor affecting the price of aluminum scrap is certainly the quantity.
In fact, to get the highest price for aluminum scrap, it must be taken to specialized foundries.
However, the latter only accept loads from companies capable of fulfilling stable supply contracts, so if you don't have the necessary tons, the material must be collected and accumulated several times.
The cost of collection, storage, transport and loading-unloading necessary for the accumulation of the quantity of aluminum scrap of all the lots necessary to reach the quantity required in the foundry will therefore have a strong impact on the value at which the small ones can be sold matches.
Not to be overlooked, the geolocation of the aluminum load is a determining factor on the price.
The further it is located from companies that purchase aluminum scrap, the more the transport cost will negatively impact the selling price.
In fact, among the various metals it is among the lightest and most voluminous, the better its preparation and reduction will be, the better its relative revenue will be.
