The weekly Davis Index P1020 premium fell by 0.4¢/lb to 27.6¢/lb above the official LME Aluminium Cash price as buyers stayed away from the market due to price volatility.
Over the week, Russia announced plans to impose a 15pc export tax on its aluminum produce, among other base metals. The tax could impact the US aluminum value chain since Rusal is one of the biggest primary product suppliers to the US market. Moreover, participants anticipate an unpredictable market over the next week on the imminent first round of state reserves auction in China in early July. Together, these trends have led to sluggish trading and for the first time this year, the Midwest premium may be heading south.
The 6063 billet premium increased by a penny to 23.2¢/lb above P1020 on Monday. Supply remains tight but bargains can still be found. Most offers were heard at around 24¢/lb, signaling that the market has started to settle down from the 26¢/lb premium in April.
Continental Aluminum, which recently entered the billet-extrusion market may play a role in shifting prices as a buyer depending on how much of its internal demand can be met from production and the amount it will buy externally.
The official LME Aluminium Cash price settled Monday at $2,458/mt ($1.115/lb), up by $100/mt from Jun 21.