The Davis Index for P1020A and 6063 billets have leveled off against the new market dynamics caused by the US tariffs on Canada, the US’s largest supplier outside of its own borders.
The Davis Index for P1020A was flat at15.2¢/lb delivered US under the three-month LME Aluminum contract on Friday. Simultaneously, the 6063 billet premium was at 7.7¢/lb above the P1020A premium, also balanced from a week ago.
The premiums have created room for more US production due to the increase in cost to Canadian P1020A. While numbers are not yet available, showing this increase, Canadian imports dropped 27pc in July 2020 compared with the same month last year, on fears of tariffs from the US. The 27pc drop would create at least that much demand for US production and potential for more as the economy expands into August with a positive outlook for September.
The three-month LME aluminum contract closed on Friday at $1,789/mt, down by $8.50/mt from $1,797.50/mt on August 31.