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Aluminum Premiums Outlook Update (April 15, 2019)

Executive Summary


1. (From April 9). APEX bill continues to gain traction, six lawmakers are now cosponsoring the APEX bill, aiming to regulate aluminum MW premium references.

Rep. Glenn Grothman (R-WI) was registered yesterday as a cosponsor, joining previously reported cosponsors Rep. Grace F. Napolitano (D-CA), Rep. Doug Lamborn (R-CO), Rep. Scott R. Tipton (R-CO), and Rep. Warren Davidson (R-OH)—in addition to the original cosponsor Rep. Ken Buck (R-CO) and the bill's sponsor Rep. Al Lawson Jr. (D-FL).

More details in full report.

2. (From April 10). CME MW duty-paid financials firm up but still way below journalistic references.

Preliminary data indicates that CME MW duty-paid premium financials for H2 2019 increased today to a one-week high of 17.67 cent/lb, up 0.20 cent/lb from yesterday and 0.21 cent/lb higher than a week ago. Today’s preliminary transacted volume for H2 2019 contracts was equivalent to 20,000 mton, the largest transacted volume on record for this period. US MW duty-paid financials curves (both CME and LME) continue in a steep backwardation to journalistic spot references.

More details in full report.


3. (From April 11). MJP PREMIUM UPDATE. MJP spot premium widens to $95–$110 per mton amid supportive contangos.

HARBOR's MJP (Main Japanese Ports) CIF P1020 ingot spot transaction premium widened to a ten-month high of $95–$110 per mton from a previous $94–$100 per mton. As of today, MJP spot premiums stand slightly above the high end of HARBOR’s estimated long-term equilibrium range of $70–$100 per mton.

More details in full report.


4. (From April 11). EUROPEAN BILLET ALERT. Spot billet premiums decline further across the board amid demand weakness; have not bottomed out yet.

European extruders are finding plenty of billet unit availability in the spot market as we hear from the trade that several consumers are fielding multiple offers with commonly used payment terms (not cash) that seem to have gotten lower almost on a weekly basis. Premiums have not bottomed out yet.

More details in full report.