April Aluminum MMI Steady, Despite LME Warehousing Court Decision

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March saw a decision in the much-watched lawsuit filed by the world’s largest aluminum manufacturer, UC Rusal, against the London Metal Exchange over long queues to remove product from LME warehouses. It was also the month that CME Group, owner of the Chicago Mercantile Exchange, announced a new aluminum futures contract that will begin trading out of the Midwest soon. The monthly Aluminum MMI® registered a value of 89 in April, on par with March’s value.

April Aluminum MMI.

The April Aluminum MMI shows a steady level despite lawsuits and industry rows over warehouse queues.

While the aluminum price remains at its lowest levels, physical premiums keep increasing their importance in the total price an industrial buyer pays for its aluminum products. This is making aluminum buyer’s life a lot harder as they can’t find ways to completely hedge their risk exposure. Meanwhile, the CME Group is working on solving this problem by introducing its new aluminum futures contract, starting in May. We will watch closely if these developments put pressure on the LME queues.

Regarding the LME price, nothing signals an upturn in aluminum prices. Aluminum continues in its perfect long-term downtrend and prices keep showing weakness.

Aluminum has been falling on the LME for three months.

Three-month aluminum trend on the LME.

European 5083 plate prices increased from EUR undefined ($3,373) to $3,424 per metric ton last month. The 3-month price of aluminum rose 0.5 percent on the LME over the past month to $1,773 per metric ton. At $1,730 per metric ton, the cash price of primary aluminum increased 0.3 percent on the LME.

The Chinese aluminum cash price ended the month at $2,036 per metric ton, down from $2,036. After rising the previous month, European 1050 aluminum prices dropped 1.1 percent to $2,826 per metric ton. Indian aluminum primary prices fell 1.0 percent to $1.78 per kilogram after rising the previous month.

FREE Download: The Monthly MMI® Report – covering the Aluminum market.

Hovering around $3.96 per kilogram for the month, Korean 3003 coil premium over 1050 sheet remained unchanged. At a price of $4.10 per kilogram, Korean 5052 coil premium over 1050 sheet did not budge the entire month. Chinese aluminum bar traded sideways last month, staying around $2,284 per metric ton. The price of Chinese aluminum billet held steady around $2,186 per metric ton last month. Korean 1050 aluminum sheet held pat last month at $3.91 per kilogram. Last month was consistent for Chinese aluminum scrap, which did not move from $1,970 per metric ton.

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.

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