Davis Index: Market Intelligence for the Global Metals and Recycled Materials Markets

The weekly Davis Index P1020 Midwest premium rose 4¢/lb to 34.9¢/lb above the official LME Aluminium cash price on Monday with the strike at Rio Tinto’s Kitimat smelter that began last week setting back the North American primary supply chain.


Imports into the country continue to decline. The 10pc Section 232 tariff, coupled with Russia’s 15pc export tax has made it unfeasible to source P1020 from Russia. Moreover, imports from Canada and the UAE are also much lower than last year. Over the past seven months, the primary aluminum industry has witnessed a perfect storm, leading to the 20¢/lb increase in the premium over this period. 


The Davis Index 6063 billet premium fell by 2.8¢/lb to 22.2¢/lb above P1020 due to a slump in demand. While the market was reportedly undersupplied a few months ago, it is now at its saturation point. 


Market participants confirm that despite considerable demand from the construction industry, the lack of labor, especially in the heat of summer, has led to a slowdown in this sector. Thus, extruders are barely buying any billet, for now. Most buyers have set their bids at 20¢/lb this week and can find deals at that price level. 


The official LME Aluminium cash price hit a new annual high on Monday, closing at $2,628.50/mt, up $129/mt from Jul 26. 

Leave a Reply

Your email address will not be published.