The weekly Davis Index P1020 premium moved up by 1.2¢/lb to 23.5¢/lb above the LME Aluminum cash price as supply constraints continued.
Supply of primary metals remains tight in the US, despite growing demand from a recovering economy. Freight and inland trucking costs have also spurred the premium higher. Additionally, Section 232 tariffs are curbing large quantities of offshore material from entering the market. Given these factors, the P1020 premium is expected to soar until summer.
The premium for 6063 billet held unchanged at 24.5¢/lb above P1020 for the third successive week due to subdued trade. However, some offers were heard at around 25¢/lb as traders tried to test the waters for contractual material though casting houses report that an immediate increase in production is unlikely.
The LME Aluminium cash price settled Monday at $2,331/mt ($1.057/lb), up by $77/mt from Apr 12.