LME Aluminum Prices Still Drift Below Marginal Cost of Production

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graph of aluminum price index august 2013

Our aluminum price index inched up one point to 91 this past month after falling four points the previous month, primarily driven by strength in semi-finished prices from both Korea and Europe, as well as the Chinese scrap price.

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“The slight rise in aluminum semi prices out of Europe appears significant to us, particularly because the European economy has appeared weak for quite some time,” said Lisa Reisman, managing editor of MetalMiner. “However, LME prices continue to drift below the marginal cost of production, which will have the effect of limiting further Aluminum MMI® price increases.”

Compare with last month’s trends – here’s our free July MMI® Report.

The LME warehouse situation has finally taken center stage in aluminum markets as warehouse operators draw the ire of regulators as well as an end user that recently filed a legal case against the LME and Goldman Sachs. Read more of our LME warehouse coverage.

Main Drivers

After dropping the previous month, the price of Chinese aluminum scrap prices rose 3.7 percent. The price of Chinese aluminum billet rose 2.5 percent after falling the previous month. After dropping the previous month, the Indian aluminum cash price prices rose 1.4 percent.

European 5083 plate rose 1.7 percent for US buyers. The value of European 1050 aluminum increased 2.1 percent this month.

On the LME, the 3-month price of aluminum remained essentially flat for the month at $1,778 per metric ton. On the LME, the primary aluminum cash price held pat last month at $1,732 per metric ton. Prices for Korean 3003 coil premium over 1050 sheet, Korean 5052 coil premium over 1050 sheet, and Korean 1050 aluminum sheet all increased slightly over the month.

Meanwhile, the Chinese aluminum cash price was down 0.8 percent.

Don’t forget to read July 2013 MMI analysis before August’s report comes out next week!

The Aluminum MMI® collects and weights 12 global aluminum price points to provide a unique view into aluminum price trends over a 30-day period. For more information on the Aluminum MMI®, how it’s calculated or how your company can use the index, please drop us a note at: info (at) agmetalminer (dot) com.