The Davis Indexes for P1020A and 6063 billets premiums moved south this week. The removal of the US tariffs on Canadian aluminum supply hasn’t resulted in immediate benefits, though interested foreign primary aluminum producers with favorable currency exchange rates, especially on the billet side, are sniffing around the US market.
The Davis Index for P1020A premium was lower by 1.5¢/lb at 11.9¢/lb delivered US consumer under the three-month LME Aluminum contract on Monday. The 6063 billet premium also inched down by one-tenth of a penny to 7.2¢/lb above the P1020A premium.
The market could continue struggling with trying to understand the import-export balance required to hold off the US Trade Commission from imposing new tariffs. Consumers want to buy the cheapest product available, but not all suppliers are willing to sell into the US market. However, most market participants agree that buying from the US’ neighbors to the north makes the most sense for the health and well-being of the USMCA compared with purchasing the material from a source outside North America.
The three-month LME aluminum contract closed at $1,773/mt on Monday, down by $4/mt from its close of $1,777/mt on Sep 28.