The Davis Index P1020 premium was unchanged at 34.7¢/lb above the official LME cash price on Friday amid persistent supply issues in the US domestic market.
The domestic market for P1020 seems to be constantly undersupplied. With imports and production at record lows compared with historical data, most participants expect the P1020 premium to remain at the present level until the winter season ends. Spot deals remain low while the industry waits for the ball to drop since most buyers don’t want to purchase material at this price as it is almost 20¢/lb higher than a year ago.
Meanwhile, the 6063 billet premium moved up by 0.2¢/lb to 22.7¢/lb above P1020. This market seems to have found its common ground as well. Pricing wise the market is now balanced with both buyers and sellers in agreement at this level. Besides, supply has begun to outpace demand from the construction industry and will continue to do so as winter approaches.
The official LME Aluminium cash price settled Friday at $2,644/mt (1.20¢/lb), up by $97/mt from Aug 9.