The US premiums for new aluminum climbed for P1020A and trended flat for 6063 billets over the past week. Tight supply and higher freight costs have kept buyers under pressure, forcing them to pay more for prompt units after the holidays. Expectations of a strong aluminum market in 2021 are also impacting premiums.
The weekly Davis Index for P1020A increased by 0.4¢/lb to 14.9¢/lb delivered US consumers under the three-month LME Aluminium contract on Monday. Simultaneously, the 6063 billet premium held at 8.5¢/lb above the P1020A premium.
Supply for P1020A has been tight ever since Canada peeled back on imports to stay under the US trade commission’s radar. Now that Canada has re-instated lockdowns due to rising COVID-19 cases, production of the P1020A could be impacted and in turn, affect supply, forcing premiums higher.
The three-month LME Aluminium contract closed at $2,016/mt on Monday, up by $12/mt from its close of $2,004/mt on Dec 29.