US secondary aluminum alloys prices leveled off on Friday for most grades with A380.1 solidifying its pricing position at 70¢/lb.
Overall market demand has improved as reflected in the Purchasing Managers Index, beat expectations of 49.5 for June to jump to 52.6 last month, from 43.1 in May and 41.5 in April.
The trinity of demand, consumption, and inputs is primed to enter a demand-driven expansion cycle moving into H2 2020, according to market participants. The trend is a bright spot for secondary smelters who now see the increase in consumption driving better numbers for demand.
The weekly Davis Index for A380.1 held at 70¢/lb delivered US consumer on Friday though more sales volumes were achieved at that level.
The index for A360.1 was flat at 81.5¢/lb delivered US consumer while A413.1 stayed in line with the rest of the alloys indexing two-tenths of a cent lower to 83.2¢/lb delivered US consumers.
The three-month LME aluminum contract closed Friday at $1,692/mt, up by $37.5/mt from $1,654.50/mt on July 17.
Macroeconomic indicators also point to a better H2 2020 compared to the first six months. According to the US Bureau of Economic Analysis, the manufacturing sector’s labor productivity edged up by 0.3 pc to 108.029, the first gain since Q1 2019, as output slid 6.3pc and hours worked declined 6.6 pc. Productivity was better for Q2 2020 (Feb, Mar, Apr) at 108.029 than Q3 2019 (Aug, Sep, Oct) at 107.958 and marginally lower than Q1 (Nov, Dec, Jan) at 108.276.