The weekly Davis Index premiums for P1020 and 6063 billet jumped on Monday as producers raised their offers on strong demand.
The weekly Davis Index P1020 premium rose by 2.1¢/lb to 18.9¢/lb above the official LME cash settlement. Market participants expect the P1020 premium to move closer to the 20¢/lb mark during the week as demand outpaces supply.
Buyers have begun restocking and are placing multiple large orders amid speculation of increasing replacement costs. Many are willing to pay above the market costs to cut the competition, thus lifting premiums.
The 6063 billet premium moved up by a cent to 18.3¢/lb above the P1020 premium. The billet premium, which outpaced prime in earlier weeks has now slowed down due to better availability of imported material. Some offers were heard as high as 19¢/lb but no deals were reported at that price.
The official LME cash price settled Monday at $2,184.50/mt (99¢/lb), up by $32/mt from Mar 8.