The weekly Davis Index P1020 premium was flat at 30¢/lb above the LME Aluminium cash price on Monday as buyers decided to step back and wait for prices to cool down. Panic buying stopped after buyers became aware that prompt delivery is available when needed.
The supply of primary aluminum in the domestic market remains strained by a lack of imports and declining local production. On the other hand, demand for aluminum continues to grow for both construction and automotive purposes. Reports from the US Census Bureau detail that US P1020 imports in May declined by almost 40pc from Canada and UAE, two of the biggest primary aluminum suppliers to the US.
Meanwhile, the index for the 6063 billet premium slipped by 0.1¢/lb to 26.7¢/lb above P1020. Cast houses and billet presses are working overtime across the country but still aren’t able to meet demand from the construction and auto industry. Most market participants don’t expect to see this change until the end of this year, unlike the summer drop in this premium that was initially expected.