How is the value of aluminum scrap calculated?
The price of aluminum scrap is not fixed, but is determined by the intersection of five strategic factors:
LME Quotation: The starting value is based on the official prices of primary and secondary aluminum on the London Metal Exchange.
Quality and Category: The purity of the material and its commodity classification directly influence the economic yield.
Cargo Volume: Large quantities reduce logistics costs per ton, shortening the recycling chain.
Logistics Costs: The distance between the storage point, the producer, the processing plant, and the final recipient affects transportation costs.
Instantaneous Demand: The operational needs and active contracts of foundries and wire drawing mills at that precise moment.
The Role of the Market: Why Does Price Fluctuate?
The LME price reflects the performance of the real economy and is driven by three main drivers: market demand, global inventories, and financial speculation.
The driving force is demand for semi-finished aluminum products from manufacturing industries. Consumption trends in these key sectors determine the value of scrap:
Automotive and Transportation: Mechanical components and lightweight frames.
Construction and Architecture: Windows, facades, and structures.
Aerospace and Naval: Ultra-high-strength alloys.
Consumer Goods: Packaging and furniture.