April 2012 | Aluminium Weekly Market Tracker
Primary and Secondary Fundamental Analysis
Analysis of consumption and production of primary aluminium, and an analysis of the market drivers of secondary aluminium and aluminium scrap.
Strong incentives from warehouse owners to deliver ingot to local warehouses which is subsequently locked in financing deals is discouraging some smelters to switch their product mix away from P1020. Although US billet premium remain on multi month high it has not experienced the same growth as primary ingot premiums. As a result the differential between both premiums have decreased which lowered conversion margins and increased opportunity cost for producing billet. The supply shortage has been further aggravated by recent shutdown of Alcoas Massena billet line due to the fire and planned 10-day outage of Hydro Arvida smelter in Quebec due to maintenance. This comes in the period of stronger US billet demand from all key US industries. Some of this shortage has been mitigated by US imports particularly from lower cost UAE and Qatar smelters which in recent years have been making steps to broaden their international customer base...
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