The Davis Index for P1020A and 6063 billet premiums delivered US Midwest settled at slightly higher levels on Monday as the US begins its restart efforts after COVID-19 related lockdowns.
The weekly Davis Index premium for P1020A moved up to 8.7¢/lb delivered US Midwest, under the three-month LME aluminum contract on Monday, inching up by two-tenths of a penny. Volumes were lower coming off the last week due to the Memorial Day holiday in the US.
The premium for 6063 billets also moved up slightly from 5.7¢/lb to 5.8¢/lb delivered US Midwest under the same LME aluminum contract.
The three-month LME aluminum contract closed on Monday $1,540/mt up by $27/mt from $1,513/mt on May 26.
Premiums have bottomed out with activity trying to pick back up in the US. However, concerns over credit and overproduction are some hurdles that the aluminum industry will have to stare down in the near- to medium-term.
Poor financial performances along the aluminum supply chain could prevent material from flowing along regular lines and exacerbate problems for some suppliers while creating a window of opportunity for those that are not plagued by credit issues or are trying to break into the sector.