The Davis Index P1020 premium lifted by 0.9¢/lb to 28.5¢/lb above the official LME cash price on Friday as supply tightness continued in the US domestic market. Some heard the premium offered as high as 29¢/lb on Jul 1.
The Aluminum Association is trying to justify exemptions for fairly trading countries like Canada and Russia, but the latter’s government has now approved a 15pc export tax on all base metals mined and refined in the state. This means any P1020 products imported from Russia to the US now come with a 25pc tariff. This, perhaps, had led to traders raising premiums despite LME cash being very close to its 2021 peak this week.
The 6063 billet premium, on the other hand, trended down as market supply continues to improve from the extreme scarcity of a few months ago. Besides, secondary billet producers now have much more scrap available from steady demolition work around the US, putting pressure on primary prices. The 6063 billet premium settled at 22.7¢/lb above P1020, down by 0.5¢/lb with some bids heard as low as 21¢/lb. Market participants see the correction as the start of healthy trading.
The official LME Aluminium cash price settled Friday at $2,519.5/mt (1.143¢/lb), up by $68.5/mt from Jun 25.