The US P1020 premium delivered Midwest settled flat at 34.5¢/lb above LME Aluminium cash on Monday as the market remained cautious due to a backwardation.
Multiple trades were made at this premium during the week, while some were heard a little lower. However, the market has accepted this range as the consensus for now. With most material being imported due to low domestic production, a premium above 30¢/lb is being considered reasonable to meet increasing ocean freight costs. Still, traded volumes are currently lower than historically seen in the summer.
Meanwhile, the 6063 billet premium inched closer to 23¢/lb, rising by 0.1¢/lb to 22.8¢/lb delivered. Demand remains weak due to a lack of orders from extruders who have seen cutbacks on lower demand from the construction and auto industry. Still, supply remains a little tight on import issues such as the Russian export tax, shipping problems from the UAE as well as the Section 232 tariffs.
The LME last settled Friday, Aug 27 at 2,673/mt ($1.21/lb), up $25/mt from last Monday. The LME remained closed today for the Summer Bank Holiday in the UK.