Midwest aluminum premiums expected to rise

Jan 13, 2014 | 11:11 AM | Michael Cowden

Tags  Midwest premium, automotive, packaging, Canada, Europe, Japan, billet upcharge, Persian Gulf Ford F-150

FORT LAUDERDALE, Fla. — U.S. Midwest aluminum premiums could spiral upward to more than 20 cents per pound before crashing back to earth, according to market participants.

Indeed, the more pressing question might not be how high premiums will go but what factors will bring them back down again and when, they told AMM Jan. 12 at Platts Aluminum Symposium in Fort Lauderdale, Fla.

Some consumer sources expressed frustration with suppliers, who they said were charging more on top of what they considered to be an already inflated Midwest premium.

That "Midwest premium plus a premium" pricing model has increasingly become the norm but was expected by some to become less pronounced with significantly higher 2014 Midwest premiums, they said. But the "premium plus a premium" model remains despite high Midwest prices.

AMM’s Midwest P1020 premium rose to a range of 15 to 16.5 cents per pound Jan. 8, up from 11.5 to 12 cents per pounds previously (amm.com, Jan. 8).....

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