Should I hold on to my aluminum and copper?

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.

I remember in the late 60’s when aluminum prices went to the moon. Municipal street lamp posts started disappearing in the wee hours.

I’ve lived long enough that I’ve tried forecasting the price of nearly everything at one time or the other. Generally I’ve been wrong. Something unexpected in the market happens.
For example. I’m the 60’s they started using alum for soda cans as I recall. Mid 70’s it was introduced in beer cans.
Now the metal is so cheap that will spark a new massive use of one kind or the other. For example, Ford’s f150 and Range Rover bodies are alum and considered superior bringing higher $. They will likely vastly expand the use. I guess the big question is, how much will China flood the market !