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

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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