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Aluminum Premiums Outlook Update, September 17, 2019

Executive Summary

USA

1. (From September 13). CME MW duty-paid financials for Q1 2020 increase to a two-month high; MW financials backwardation intensifies further.

Preliminary data indicates that CME MW duty-paid premium financials for Q1 2020 were transacted today at a two-month peak of 17.43 cent/lb, increasing by 0.08 cent/lb from yesterday and 0.16 cent/lb higher than a week ago. Today’s preliminary volume for these contracts was equivalent to 3,375 mton. US MW duty-paid financials’ backwardation has intensified further.

More details in full report.

EUROPE

2. (From September 13). European spot billet premiums fall to as low as $310 per mton in Southern Europe; HAI increases footprint in Romania

Spot billet premiums fall further in Italy, Spain, Portugal, and Northern Europe as oversupply continues to bite. Moreover, we expect regional spot billet premiums to remain subdued in the coming months in part as our market intel from the ground confirms that a secondary billet producer in Southern Europe might be forced to aggressively offer its units in the regional billet spot market after missing out on most Q4 contractual market sales at a time when extrusion demand in several European markets remains soft.

More details in full report.