The weekly Davis Index P1020 premium delivered Midwest increased by 0.5¢/lb to 27.6¢/lb above the LME Aluminium cash price on Friday as tight supply and high freight costs continued to impact primary aluminum volumes.
Imported primary aluminum remains in short supply, despite reports of a slight uptick in volumes obtained from Canada this week for prompt deliveries. Still, imports from other overseas markets remain muted because of which, the few deals that did happen this week were not enough to push down the P1020 premium. High trucking costs have also kept some buyers out of the market.
The Davis Index 6063 billet premium trended flat at 24.9¢/lb above P1020, down 0.1¢/lb from May 24 as no activity was noted in this market ahead of the Memorial Day weekend. While premiums have been heard as low as 22¢/lb buyers remain out of the market and sellers do not have material. Most participants expect this trend to remain until Fall.
The LME Aluminum cash price jumped on Friday on news of President Biden planning to unveil a Budget of $6tn and increased by $97.50/mt to $2,404.50/mt ($1.09/lb) on Friday from May 24.