US export aluminum prices fell across most grades as the global container shortage continued and the LME market went into backwardation, reflecting a generally cautious sentiment.
The weekly Davis Index for 95/2 Zorba fell by 3.2¢/lb to 69.3¢/lb fas US port while 99/3 Zorba moved down to 70.8¢/lb fas, lower by 2¢/lb. Demand for secondary ingots continued to decline in Asia while buyers adopted a wait and see attitude, a market participant told Davis Index.
The indexes for Taint/Tabor and Tense made up their losses from last week, with Taint/Tabor indexing 0.9¢/lb higher at 67.2¢/lb fas while Tense rose by 1.6¢/lb to 67.6¢/lb fas US port.
The weekly index for 6063 extrusion fell by 8.3¢/lb to 81.9¢/lb fas US port while A356 wheels indexed at 83.8¢/lb fas, short by 0.5¢/lb. The LME Aluminium market backwardation increased slightly on Thursday, with the official cash offer higher than the three-month contract by $1.50/mt.
The three-month LME contract closed Thursday at $2,009/mt, down by $10.50/mt from $2,020.50/mt on Jan 7.
The global container shortage paired with reports of rising COVID-19 infections in China has kept demand for aluminum scrap subdued. While Japan has not resumed buying activity yet, its future demand is likely to drop by 40-50pc, according to some market participants.