Aluminum Premiums Outlook Update (May 6, 2019)
WHAT IS THE LATEST ON ALUMINUM PREMIUMS?
Executive Summary
USA
1. (From May 1). US MW APEX BILL UPDATE. More lawmakers join as co-sponsors of the APEX Act; nine lawmakers have now signed as co-sponsors.
The APEX Act continues to gain traction on Capitol Hill as another three representatives have joined to co-sponsor the Act. Rep. Pete Aguilar (D-CA), Rep. Elaine G. Luria (D- VA), and Rep. John H. Rutherford (R-FL) have registered as co-sponsors this week. They have joined sponsor Rep. Al Lawson Jr. (D-FL), original co-sponsor Rep. Ken Buck (R-CO), and co-sponsors Rep. Grace F. Napolitano (D-CA), Rep. Doug Lamborn (R-CO), Rep. Scott R. Tipton (R-CO), Rep. Warren Davidson (R-OH), and Rep. Glenn Grothman (R-WI).
More details in full report.
2. (From May 3). CME MW duty-paid financials for H2 2019 confirmed at a six-month high on strong transactional volumes.
Preliminary data indicates that CME MW duty-paid premium financials for H2 2019 increased today to a new six-month high of 18.28 cent/lb, unchanged from Tuesday (when the most recent volume was transacted for this period) and 0.38 cent/lb higher than a week ago. Today’s preliminary transacted volume for H2 2019 contracts was equivalent to 15,750 mton. US MW duty-paid financials curves (both CME and LME) continue in a steep backwardation.
More details in full report. EUROPE
3. (From May 3). EUROPEAN BILLET ALERT. Billet spot premiums deteriorate further across the board; various suppliers seen long on billet. Signed Q3 premium contracts below Q2.
European spot billet premiums decline further with several confirmed spot transactions recently taking place at $370 and $380 per mton in Southern Europe. Also, a Tier 1 European supplier is long, as it still holds some inventories it had accumulated in recent months that it has been unable to sell in their entirety. Similarly, an important Tier 2 supplier seems to also be long, with plenty of available billet units capable of delivering them short term without any major issues. Meanwhile, we have confirmed already signed Q3 contracts in Germany, Spain, Austria, Poland, and Italy for between $390 per mton and $430 per mton.
More details in full report.