The May Aluminum Monthly Metals Index (MMI) increased six points. Skyrocketing LME aluminum prices drove the subindex value increase. The current Aluminum MMI subindex stands at 100 points, 6.4% higher than in April. Buying Aluminum in 2018? Download MetalMiner’s free annual price outlook LME aluminum price momentum recovered strongly in April. LME aluminum prices reached […]
Tag: Aluminum MMI
Aluminum MMI: LME Aluminum Continues Downtrend
The April Aluminum MMI (Monthly Metals Index) fell three points. A weaker LME aluminum price led to the price retracement. The current Aluminum MMI index stands at 94 points, 3% lower than in March.
LME aluminum price momentum slowed again this month. LME aluminum prices remain in a current two-month downtrend.
Buying Aluminum in 2018? Download MetalMiner’s free annual price outlook
[caption id="attachment_91252" align="aligncenter" width="580"]
Source: MetalMiner analysis of FastMarkets[/caption]
Though some may want to declare a bearish market for aluminum, prices are still over the $1,975 level, when MetalMiner recommended buying organizations buy forward. Prices may retrace back toward that level. However, if prices fall below the blue-dotted line, aluminum prices could shift toward bearish territory.
SHFE Aluminum
SHFE aluminum spot prices also fell this month. The degree of the decline appears less sharp than for LME prices. However, SHFE aluminum spot prices started to fall in October 2017.
[caption id="attachment_91253" align="aligncenter" width="580"]
Source: MetalMiner data from MetalMiner IndX(™)[/caption]
Shanghai Futures Exchange (SHFE) aluminum stocks fell in March for the first time in more than nine months. Decreasing stocks sometimes point to falling inventories of aluminum in China, the world’s biggest aluminum producer and consumer. SHFE stocks dropped by 154 tons in March, according to exchange data released at the beginning of April. However, SHFE aluminum stocks still stand at 970,233 tons.
MW Aluminum Premiums
Meanwhile, U.S. Midwest aluminum premiums fell for the first time since November 2017. The $0.01/pound drop at the beginning of April comes after a sharp uptrend in the premium. Despite the lower premium this month, the pace of the increases may continue for some time.
What This Means for Industrial Buyers
LME aluminum price retracement may give buying organizations a good opportunity to buy, as prices may increase again.
However, as prices are currently trading lower, buying organizations may want to wait until the market shows a clearer direction. Therefore, adapting the “right” buying strategy becomes crucial to reducing risks.
Given the ongoing uncertainty around aluminum and aluminum products, buying organizations may want to take a free trial now to our Monthly Metal Buying Outlook.
Want to see an Aluminum Price forecast? Take a free trial!
Actual Aluminum Prices and Trends
Aluminum MMI: Markets React to 10% Aluminum Tariff Proposal
After last month’s increase, the March Aluminum MMI (Monthly Metals Index) fell two points for this month’s reading. A weaker LME aluminum price led to the retracement. The current Aluminum MMI index stands at 97 points, 2% lower than in February.
LME aluminum price momentum slowed this month. Despite the price retracement, trading volumes still support the current uptrend. The long-term uptrend remains in place.
Buying Aluminum in 2018? Download MetalMiner’s free annual price outlook
[caption id="attachment_90675" align="aligncenter" width="580"]
Source: MetalMiner analysis of FastMarkets[/caption]
Domestic Aluminum Market
February brought much uncertainty to the domestic aluminum market with the release of the Trump administration’s Section 232 reports and recommendations vis-a-vis aluminum and steel imports. That release, together with President Trump’s announcement last Thursday of a 10% aluminum tariff on all imports have activated price warning systems for all aluminum and aluminum products.
LME aluminum reacted to the news, increasing only slightly.
Additional information about Trump’s announcement, combined with specific buying strategies, can be found in the MetalMiner team’s Section 232 Investigation Impact Report.
On top of that, the U.S. Department of Commerce announced its final determination on the Chinese aluminum foil import case initiated in March 2017. The aluminum foil investigation includes all Chinese aluminum imports, and the anti-dumping margins vary from 48.64 to 106.09%, while the countervailing margins vary in the 17.14-80.97% range. This case may also add some support for LME aluminum prices in the short term.
MW Aluminum Premiums on the Rise
U.S. Midwest aluminum premiums moved again at the beginning of March and are currently trading at $0.16/pound. The U.S. Midwest Premium has now reached the same levels from March 2015; the pace of the increases appears to have accelerated since the Section 232 report release.
[caption id="attachment_90677" align="aligncenter" width="580"]
Source: MetalMiner data from MetalMiner IndX(™)[/caption]
The Section 232 outcome and President Trump’s comments around possible import remediation measures have caused increased volatility in the U.S. Midwest premium.
What This Means for Industrial Buyers
LME aluminum price retracement may give buying organizations a good opportunity to buy, as prices may increase again.
In bullish markets, buying organizations still have many opportunities to forward buy. Therefore, adapting the right buying strategy becomes crucial to reducing risks.
Given the ongoing uncertainty around aluminum and aluminum products, buying organizations may want to read MetalMiner’s Section 232 special coverage.
Want to see an Aluminum Price forecast? Take a free trial!
Actual Aluminum Prices and Trends
Aluminum MMI: Aluminum Demand Gets Boost from Automotive, Aerospace Sectors
After last month’s sharp increase, the February Aluminum MMI (Monthly Metals Index) inched up one point.
The basket of metals increased despite the slight retracement of LME aluminum prices.The current Aluminum MMI index reads 99 points, 1.0% higher than in January.
In January, MetalMiner anticipated a possible retracement in aluminum prices, as aluminum — and, generally, all base metals — increased sharply at the end of the month. LME aluminum prices fell by 2.8% in January from the previous 2-year high closing price in December.
Buying Aluminum in 2018? Download MetalMiner’s free annual price outlook
[caption id="attachment_90155" align="aligncenter" width="580"]
Source: MetalMiner analysis of FastMarkets[/caption]
Aluminum prices inched lower during the first few days of February. Aluminum prices broke out of their previous sideways trend back in August, providing a strong buying signal. As prices may continue to increase, buying organizations may want to understand how to better purchase aluminum, reducing both risks and costs.
U.S. Domestic Aluminum Market
The U.S. Department of Commerce sent the Section 232 report for aluminum products to President Trump in January. President Trump has 90 days (from January 22) to review and announce actions regarding the probe for aluminum products.
Meanwhile, domestic aluminum demand received a boost from stronger U.S. automotive and aerospace sectors.
Despite the fall in U.S. auto sales in January, aluminum producers see increased demand. Demand has increased so significantly that Novelis Inc., the biggest flat-rolled products maker, announced the investment of a new plant in Kentucky to support growing automotive demand.
[caption id="attachment_90156" align="aligncenter" width="580"]
U.S. Total Vehicle Sales. Source: TradingEconomics[/caption]
Chinese Aluminum Market
SHFE aluminum prices currently trade lower than LME prices. Although the trends appear to be similar, SHFE aluminum prices fell further in January. Lower SHFE prices relative to LME aluminum prices lead to increased Chinese exports to Asia.
[caption id="attachment_90157" align="aligncenter" width="580"]
Source: MetalMiner analysis of FastMarkets[/caption]
According to the latest Chinese customs data, Chinese exports of unwrought aluminum and aluminum products increased by 12.8% in December compared to December 2016 data. December exports also increased on a monthly basis by 15.8% over November’s figures.
Aluminum Premiums
U.S. Midwest aluminum premiums moved again at the beginning of February, and currently trade at $0.12/pound. The Section 232 investigation and uncertainty around the outcome has increased the volatility in the U.S. Midwest premium.
Other aluminum delivery premiums also increased this month. The CIF Japanese spot premium increased 12% over January, to $98.50-$110/mt from the previous $90-96/mt. The European duty-unpaid premium jumped by 8.1%, while the Brazil CIF duty-unpaid premium increased by 3%.
What This Means for Industrial Buyers
As expected after last month’s sharp increase, aluminum prices retraced in January. In bullish markets, buying organizations still have many opportunities to forward buy. Therefore, adapting the “right” buying strategy becomes crucial to reduce risks.
Want to see an Aluminum Price forecast? Take a free trial!
Actual Aluminum Prices and Trends
Aluminum MMI: Prices Rise and Trading Volumes Have Strong Showing
After last month’s drop, the Aluminum MMI (Monthly Metals Index) index increased by three points. The current Aluminum MMI index reads 98 points, 3.2% higher than the December reading. 
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In December, MetalMiner anticipated a rise in aluminum prices … and that is exactly what happened.
Aluminum prices increased by 10.6% in December, reaching a more than two-year high.
[caption id="attachment_89629" align="aligncenter" width="580"]
Source: MetalMiner analysis of FastMarkets[/caption]
Trading volumes appear strong and accompany the current uptrend. Moreover, aluminum’s latest peak has climbed over previous ones, signaling strength in its latest market rally. Other macroeconomic indicators, such as a weaker U.S. dollar and a stronger CRB index driven by higher oil prices, may continue to support aluminum prices.
Moreover, the Department of Commerce’s Section 232 investigation should see a report released mid-January, which will also impact prices. The U.S. Department of Commerce announced a new self-initiated anti-dumping and countervailing duty investigation on imports of Chinese common aluminum alloy sheet at the end of November. The U.S. has launched several anti-dumping campaigns for aluminum products this past year.
Crude Oil
As oil prices serve as a critical part of the CRB index, together with other base metals, buying organizations need to monitor oil price trends.
Moreover, there are some base metals, such as aluminum, that are strongly influenced by oil prices.
[caption id="attachment_89630" align="aligncenter" width="580"]
Crude Oil prices. Source: MetalMiner analysis of Trading Economics[/caption]
Oil prices have increased again this month. Current oil prices remain above our bullish level signal, meaning that we could expect some more upward movement for oil.
Similarly, increasing oil prices will continue to provide support to base metals prices.
Aluminum Scrap
Chinese aluminum scrap prices increased sharply this month and appear in a long-term uptrend since 2016.
The latest rally in both LME and SHFE aluminum prices also results in a jump in aluminum scrap prices. Chinese scrap prices increased by 4.9% this month.
[caption id="attachment_89631" align="aligncenter" width="580"]
Source: MetalMiner data from MetalMiner IndX(™)[/caption]
What This Means for Industrial Buyers
Aluminum prices jumped sharply again this month. After sharp price increases, base metal prices sometimes pull back to digest the previous gains. Aluminum prices may lack some price momentum this month, although that continues signaling bullishness for the light metal.
Therefore, adapting the “right” buying strategy becomes crucial to reduce risks by knowing when to buy.
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Actual Aluminum Prices and Trends
