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Aluminum ingot demand cloudy
Edited by : AL CIRCLE
2 min read
Aluminum P1020 market players remain mixed over how the resolution of the fiscal cliff standoff will impact markets in 2013.
Although global markets reacted favorably to Congress avoiding falling off the cliff - the London Metal Exchange three-month aluminum price bumped up 3.6 percent to $2,145.50 per tonne Thursday from $2,071.50 on Dec. - sources are skeptical this trend will continue, maintaining that issues such as spending and the debt ceiling still need to be resolved.
"I don’t think the fiscal situation has been solved. They only covered taxes; they haven’t covered spending, and that has to be addressed," one trader told AMM.
Although equity markets reacted favorably Wednesday, this does not mean U.S. markets are out of the woods yet, a second trader said.
Although demand could benefit as a result of the deal, it has not inspired so much confidence that producers and extruders will rush to expand capacity, the second trader said. "No one is going to make any business decisions based on this fiscal cliff resolution. I don’t think there’s anyone out there saying, “We’ve resolved the fiscal cliff, so let’s crank up the presses and hire more people.” Everyone in this industry is reactionary. They only add people when their customers order more. And when I say order more, I mean order more - not thinking about ordering more."
Few spot deals were closed this week, keeping Midwest premiums at between 10.5 and 11.5 cents per pound.
Although global markets reacted favorably to Congress avoiding falling off the cliff - the London Metal Exchange three-month aluminum price bumped up 3.6 percent to $2,145.50 per tonne Thursday from $2,071.50 on Dec. - sources are skeptical this trend will continue, maintaining that issues such as spending and the debt ceiling still need to be resolved.
"I don’t think the fiscal situation has been solved. They only covered taxes; they haven’t covered spending, and that has to be addressed," one trader told AMM.
Although equity markets reacted favorably Wednesday, this does not mean U.S. markets are out of the woods yet, a second trader said.
Although demand could benefit as a result of the deal, it has not inspired so much confidence that producers and extruders will rush to expand capacity, the second trader said. "No one is going to make any business decisions based on this fiscal cliff resolution. I don’t think there’s anyone out there saying, “We’ve resolved the fiscal cliff, so let’s crank up the presses and hire more people.” Everyone in this industry is reactionary. They only add people when their customers order more. And when I say order more, I mean order more - not thinking about ordering more."
Few spot deals were closed this week, keeping Midwest premiums at between 10.5 and 11.5 cents per pound.
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