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

The US aluminum P1020 premium was rangebound at 34.7¢/lb del US Midwest, down 0.2¢/lb on Monday after rising to an all-time high of 34.9¢/lb last week due to high Midwest prices and tight supply.


The P1020 premium is expected to trend within this range at least until mid-Fall when higher imports and market participants beginning negotiations for 2022 contracts. However, some suppliers expect a further upside of 3-4¢/lb during the quarter amid extremely tight supply and if that happens, the decline may also be immense once supply improves. 


Some producers, however, do not anticipate this trend in Q4 2021, which may lead to premiums rising further. The volume increase reported by Century Aluminum in their latest quarterly earnings report is also not expected to have a large impact on the supply chain.


In the meantime, the US 6063-billet premium inched up by 0.3¢/lb to 22.5¢/lb above the P1020 premium. The market for this material remains weak due to a slowdown in the construction sector because of labor shortages. Moreover, supply chain issues continue to affect the auto industry’s production, which has also resulted in weaker demand for 6063.

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