The weekly Davis Index for P1020A premium delivered US Midwest decreased on Monday as suppliers looked to reduce inventories amid the COVID-19 crisis.
The Davis Index premium for P1020a decreased by a penny to 12.5¢/lb delivered US Midwest, under the three-month LME aluminum contract on Monday while the premium for 6063 billet remained unchanged at 6.5¢/lb delivered US Midwest under the same LME aluminum contract.
The three-month LME aluminum contract closed on Monday at $1,528/mt, down by $40/mt from $1,568/mt on March 23.
The idling of the big three carmakers’ plants in the US has weakened demand from the automotive industry resulting in a substantial impact on aluminum premiums. The demand from the aerospace sector could be the next to take a hit as airlines look to reduce the number of flights. Without the aircraft flying, maintenance departments will not need to replace parts, lowering demand for metals in the industry.
Aluminum cans have been a relatively bright spot for the industry as consumption of carbonated beverages, both alcoholic and non-alcoholic—most of which are sold in aluminum cans—is high with so many people confined to their homes.