NEW YORK Aluminum billet
producers have reported a rise in inquiries ahead of the July 4
holiday, but capacity constraints have prevented most suppliers
from taking advantage of the high level of interest.
Spot billet premiums remained
firm at between 12.5 and 13.5 cents per pound this week, with
some producers maintaining they would not consider selling
below 13 cents.
"Premiums are higher than
Ive ever seen them before," a billet consumer said,
calling the market "tight."
"Were fortunate to have
some good relationships so we have been able to get metal, but
lets just say it is certainly tighter than it has been
for probably four years," the consumer said.
One producer told AMM
he has been receiving plenty of spot inquiries but would not be
able to accept them as he is planning a routine maintenance
outage over the July 4 holiday, making supply slightly more
restricted than normal.
"(Weve got) no capacity
but many inquiries," he said, adding that the last spot deal he
closed was in mid-June at 13.4 cents per pound for June and
"People tell me to call them if
we have any spot," a second producer added, noting that
although he has little excess material to sell, the market is
very much a sellers market today. "Business is good,
premiums are up, the LME is down. I had a customer tell me this
morning that (markets) have convincingly turned in our favor,
and that I can charge whatever I want."
The cash aluminum contract on
the London Metal exchange traded at $1,810.5 in the officials
Wednesday, its lowest level since October 2009, before
recovering slightly to $1,832.50 Thursday.
Meanwhile, discussions for next
years billet contracts continue.
"Weve started working on
2013 contracts. Extruders are interested so we started early,"
the first producer said.
A third producer said he has
received inquiries from potential new customers about contracts
for next year as well.
"I feel like Im being
courted," he said. "He wanted to see our capacity. Hes
had a nightmare securing billet (this year). I told him I
havent done spot in the last couple of months because we
have to meet our contract customers needs. I think it was
music to his ears."