The Davis Index for P1020A and 6063 billet premiums delivered US Midwest were unchanged from last week.
The weekly Davis Index premium for P1020A was flat at 8.7¢/lb delivered US Midwest, under the three-month LME aluminum contract on Monday.
The index for 6063 billet premiums was also unchanged at 5.8¢/lb delivered US Midwest under the same LME aluminum contract.
Premiums have leveled off in part because of the price run on the three-month LME aluminum contract, which has to rebound by $136/mt from its lowest point for the year back in early April, to close at its highest number since the collapse brought on by COVID-19. The three-month LME aluminum contract closed on Monday, $1,596/mt up by $56/mt from $1,540/mt on June 1.
Recent data released by the Institute for Supply Management indicated manufacturing sectors contracted in May, although at a slower rate than previous months. The report indicates May as a potential transition month on the road to recovery on the back end of the pandemic giving hope to the market for a quick recovery.
However, gaps in the aluminum supply chain could continue to impact the markets moving forward due to lack of demand, inventory issues, or further employment reductions. These gaps could allow volatility to remain part of the recovery equation, making market participants more cautious in their decision making.