Aluminum Premiums Outlook Update (March 11, 2019)

Executive Summary

USA

1. (From March 8). MW duty-paid spot premium weakens further as more bearish factors emerge.

HARBOR's US MW P1020 Ingot Duty-Paid Consumer-Supplier Spot Transaction Premium fell today to a new one-year low of 16.35-16.80 cent/lb (equates to MW journalistic references minus 2.90 to minus 2.45 cent/lb), down from a previous 16.35-16.95 cent/lb range. More than 50% of the most recently transacted volume has taken place at the low end of the new range.

More details in full report.

2. (From March 8). NORTH AMERICAN EC WIRE ROD ALERT. Regional shortage increases spot EC wire rod premiums by an additional 0.50 to 1.0 cent/lb.

As anticipated, the number of North American inquiries for EC rod units seem rising as Sural's production halt last month seems to have started to push an increasing number of regional EC rod consumers to look for additional EC rod units in the spot market. Open active capacity of the remaining EC rod domestic North American suppliers seems insufficient to close the gap.

More details in full report.

EUROPE

3. (From March 8). Q2 contract negotiations extending a bit more with more Turkish suppliers offering units. Spot premiums in North Europe, Italy, and UK weaken.

European Q2 billet contract negotiations are extending until the last minute with more than two-thirds of the market having already finalized their second quarter negotiations and the remaining contract balances expected to be mostly closed within this week or next at premiums between $440–$480 per mton. Turkish billet units from multiple suppliers are being offered in Italy and Spain, with some of these units being marketed by traders and others being sold directly by producers.

More details in full report.