The weekly Davis Index P1020 premium rose by a penny to 24.5¢/lb above the LME Aluminium cash price on tight metal supply, which has kept the premium at a multi-year high.
The premium has risen gradually due to many factors that have led to a limited supply of the material. On the one hand, lower production has led to uncertainty about replacement costs at trading houses. On the other, imports have been squashed by the Section 232 tariff and inland freight costs are rising as the economy recovers. As a result, sellers are constantly quoting higher and testing the waters to get the highest upcharge possible.
Meanwhile, the Davis Index 6063 billet premium moved up by 0.2¢/lb to 24.7¢/lb above the P1020 premium. While no spot material is on offer, some traders who can find material are quoting above 25¢/lb due to the extremely tight supply as strained production capacity and a lack of extrusion scrap has buyers grappling to find volumes even at higher prices.
The official LME Aluminium cash price settled Monday at a new annual high of $2,388/mt ($1.083/lb), up by $57/mt from Apr 19.