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

The weekly Davis Index P1020 premium fell by 0.3¢/lb to 27.1¢/lb (delivered Midwest) above the LME Aluminium cash price amid sluggish trading. This premium has risen 12¢/lb over the past six months when compared to the 15¢/lb surcharge at beginning of 2021. 


The market has been rather quiet this week, with few deals heard at 27-27.2¢/lb over. The lack of imported metal, which plays a huge role in the US aluminum supply chain is cited as the key factor for the high premiums. Moreover, domestic smelting capacity is not on par with demand, and inland freight to the Midwest continues to remain expensive and hard to find. The expected inflow of overseas material has not come through due to various factors, like shipping and logistics and the 10pc Section 232 tariff, which has effectively ousted some players from the ring. 


The Davis Index 6063 billet premium remained at 25¢/lb above P1020 as no activity was noted in this market. While higher premiums have been heard, no sellers actually have tonnage to sell. Most participants don’t expect to see any change due to a dearth of supply until Fall. Some participants prefer to wait on the sidelines and will trade only when the premium moves lower than 24¢/lb. 


The LME Aluminum cash price continued its bear run, touching $2,307/mt ($1.046/lb) on Monday, down by $148/mt from May 17.

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