Platts
US aluminum premium holds at 11 cents
Edited by : AL CIRCLE
2 min read
The Platts US aluminum premium remained flat at 11 cents/lb plus London Metal Exchange cash, delivered Midwest, January 4, as most market participants were just coming back from the holiday break and finalizing their year-end inventory positions as well as planning for the coming year.
Business in 2013 is expected to be solid, and some market participants said premiums may rise by as early as the end January, but for now factors point to a steady premium.
"I think premiums are going to stay very, very stable at 11 cents or [possibly will increase]," said a producer. "We've sold a good chunk forward, and I'm seeing a few people coming in for units, but I don't have too many units to sell on a spot basis."
A trader thought the premium was stagnant at 11 cents because "no one is coming in this week to buy anything." He said he did not see any trades at 11.5 cents yet, like some other traders claim to get.
On January 1, Congress reached an agreement to avoid automatic tax hikes and deferred a decision on spending to a later date.
A mill consumer in the South said his main source for P1020 lowered its premium offer by half a cent to 11 cents to take material off its floor earlier in the week, but January metal was back up to 11.5 cents for him which is what he has been paying for the last month and a half.
He said he normally paid half a cent higher for his location, but at one point was paying a cent more at the end of last year when premiums were weakening.
The recent cancellations extended the queue from January 2014 to July 2014. There is no guarantee the metal — now or then — will flow to the physical market. Metal can be held for financing or put back into the end of the queue again. Total LME aluminum stocks as of January 4 were 5.22 million mt.
Business in 2013 is expected to be solid, and some market participants said premiums may rise by as early as the end January, but for now factors point to a steady premium.
"I think premiums are going to stay very, very stable at 11 cents or [possibly will increase]," said a producer. "We've sold a good chunk forward, and I'm seeing a few people coming in for units, but I don't have too many units to sell on a spot basis."
A trader thought the premium was stagnant at 11 cents because "no one is coming in this week to buy anything." He said he did not see any trades at 11.5 cents yet, like some other traders claim to get.
On January 1, Congress reached an agreement to avoid automatic tax hikes and deferred a decision on spending to a later date.
A mill consumer in the South said his main source for P1020 lowered its premium offer by half a cent to 11 cents to take material off its floor earlier in the week, but January metal was back up to 11.5 cents for him which is what he has been paying for the last month and a half.
He said he normally paid half a cent higher for his location, but at one point was paying a cent more at the end of last year when premiums were weakening.
The recent cancellations extended the queue from January 2014 to July 2014. There is no guarantee the metal — now or then — will flow to the physical market. Metal can be held for financing or put back into the end of the queue again. Total LME aluminum stocks as of January 4 were 5.22 million mt.
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