Aluminum mill spreads tightened for most grades over the week as the LME Aluminium market moved lower due to news regarding a wave of COVID-19 outbreaks across China. 


The LME Aluminium market lost ground from its 2020 peak on Dec 12 at $2,062/mt, falling to the low $2,000/mt mark at the end of the year and bouncing back to close at $2025/mt today. Today, the LME market recorded its first backwardation in 2021, with the official cash offer closing 50¢/mt higher than the three-month contract.

The spread for mill-grade 1100 & 3003 clips was tighter at 1.2¢/lb under the three-month LME aluminum contract on Tuesday, better by 0.2¢/lb. At the same time, the weekly Davis Index for the grade declined by 0.4¢/lb to 90.6¢/lb delivered US consumer.

The weekly Index for 5052 clips fell by 0.7¢/lb to 96¢/lb delivered US consumer. Meanwhile, the spread narrowed by 0.7¢/lb to 4.2¢/lb above the three-month LME aluminum contract, largely driven by purchases in the southern US.

The spread for scrap 6063 was tighter by 1¢/lb at 2¢/lb above the three-month LME aluminum contract, while the index for the grade increased to 92.4¢/lb delivered US consumer, better by 1.45¢/lb. The weekly spread for mill-grade MLC was tighter at 21¢/lb, better by 0.9¢/lb, while the index for the grade was higher by 0.3¢/lb at 70.8¢/lb delivered US consumer.

The three-month LME Aluminium contract closed Tuesday at $2025/mt, down by $13/mt from $2038/mt on Jan 5.

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