The Davis Index P1020 premium settled unchanged at 34.5¢/lb delivered above LME Aluminium cash amid the continued limited supply of the material.
Market supply remains rather tight due to a lack of imports and faltering domestic production. In China, the government has persuaded primary smelters to come together and address the all-time highs reached by the Shanghai Futures Exchange (ShFE). However, market participants expect these issues to persist until early 2025 when smelters are relocated to Yunnan, which has cleaner energy sources such as hydropower and hydrogen.
Meanwhile, the 6063 billet premium settled at 21.7¢/lb above P1020, down by 1.1¢/lb from last week. Buyers seem to have procured enough inventory for the next few months and don’t intend to buy any more until the end of the year. This has dragged prices lower with bids heard at 20¢/lb. Now, premiums for January and annual delivery contracts are being negotiated. Some of these were heard settled at 21-22¢/lb above P1020.