The US premiums for new aluminum delivered US consumers moved higher for P1020A and held at the same level for 6063 billets over the past week. Tight supply and higher freight costs have put pressure on the market and have buyers willing to pay more and sellers happy to sit on their inventory.
The weekly Davis Index for P1020A was higher by 0.7¢/lb, at 13.8¢/lb delivered US consumers under the three-month LME Aluminum contract on Monday due to higher freight costs and tight supply. Simultaneously, the 6063 billet premium was at 8.5¢/lb above the P1020A premium, the same as last week.
Canadian quotas on P1020A have limited the product’s availability and have helped push premiums upward. With added pressure from higher freight costs due to increased freight utilization during to the pandemic, buyers have to incentivize the supply chain to procure the material they need.
The three-month LME aluminum contract closed today at $2054/mt, up $35.50/mt from its close at $2018.5/mt on Dec 7.