Midwest aluminum premiums rise further

Jan 23, 2014 | 01:47 PM | Michael Cowden

Tags  aluminum, Midwest premiums, P1020, aluminum scrap, production cuts, Michael Cowden

CHICAGO — Midwest aluminum premiums continue to climb, although the magnitude of the increases has moderated as some market sources question its sustainability while others insist that high premiums are here to stay.

AMM’s spot P1020 premium jumped to 20.5 to 21 cents per pound Jan. 22 from 19 to 20 cents a week earlier and 11.5 to 12 cents at the beginning of this month.

Consumer sources also reported being charged premiums of 1 to 2 cents on top of the Midwest premium, mostly by trading firms that justified the move by citing high replacement costs.

Some market sources blasted the extra premium, which they said is difficult to pass along to downstream customers, while others said downstream buyers are increasingly accepting the extra charge because they understand that metal is tight in North America.....

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