The weekly US premiums for new aluminum climbed marginally for P1020A and were unchanged from last week for 6063 billets.
The LME Aluminium market remained in backwardation this past week with cash offers exceeding the official three-month contract since Jan 12, with fears of a new COVID-19 shutdown in China being a possibility.
The weekly Davis Index for P1020A premium moved up by 0.1¢/lb to 15.2¢/lb delivered US consumer under the three-month LME Aluminium contract. The 6063 billet premium was flat at 8.5¢/lb above the P1020A premium.
Market participants believe that aluminum premiums could be driven higher on concerns over tight supply and higher freight costs due to the ongoing container shortage. On the other hand, the backwardation in the aluminum market has also softened buying activity for primary aluminum.
The three-month LME Aluminium contract closed Friday at $1,998.50/mt, up by $18/mt from its close of $1,980.50/mt on Jan 9.