US aluminium scrap imports inched higher while exports declined y-o-y in Nov '15

Aluminium imports of ingot, scrap and mill products into the U.S. and Canada (excluding cross-border trade) totaled 417 million pounds in November 2015, up 1.0 percent over the November 2014 total of 413 million pounds.

Including scrap, which accounted for roughly 57 percent of reported aluminium exports in November, exports totaled 522 million pounds, down 5.5 percent from a year ago. Excluding scrap, exports totaled 224 million pounds, down 7.3 percent from last year.

Exports of scrap decreased 4.2 percent year-over-year. Through November, imports were up 9.0 percent to 5,544 million pounds while exports were off 14.5 percent to 5,851 million pounds.

Key U.S. economic indicators released over the past week showed a mixed picture. The strength of the U.S. dollar over the past year or more seems to be putting more pressure on the manufacturing sector via reduced exports. Construction spending also disappointed, posting a decline when consensus anticipated a healthy advance. But it’s only one data point and both residential and non-residential markets remain in a strong uptrend.

It is to be noted that aluminium prices remained depressed over the past week. The drop in the cash price coincided with a widening contango. The 1-year spread doubled from $40/mt a week ago to nearly $80/mt currently. The spread is around the breakeven point to finance inventories. Such an endeavor was unprofitable in Q4 and likely brought additional supply of metal to the physical market.

Meanwhile, premiums worldwide are either rising or holding steady. The Japanese premium settled at $110/mt for Q1, up over 20% from the Q4 contract. The U.S. premium held at 8.9¢/lb.