NEW YORK The spot aluminum billet market remained sluggish Wednesday with lower spot sales volumes due to a slight seasonal slowdown in auto demand.
However, diminishing inquiries for spot deals didnt dampen premiums, which remain between 12.5 and 13.5 cents per pound.
"Were still completely full, but we havent received as many spot/extra requests lately," one producer told AMM. The last spot deal he sold was 12.5 cents per pound last week, adding that he did manage to book some forward 2013 business at these levels.
"Weve seen a slight softening for August business," a second producer said, adding that he closed just one spot deal for 6063 billet at 12.5 cents on Tuesday and two truckloads at 13 cents last week.
"Were not in the spot market this week," a consumer added. "We havent seen any pickup in business."
Participants are reporting a slight softening in demand in the automotive and truck and trailer markets in the second half of the year after a blistering first half, but maintain it is due to seasonality rather than a larger economic slowdown.
Kaiser Aluminum Corp., Foothill Ranch, Calif., has forecast a 10-percent decline in automotive build rates in the second half compared with the first half (amm.com, July 27), while Pittsburgh-based Alcoa Inc. readjusted its truck and trailer forecast to a range of 4 to 8 percent from its original 7- to 12-percent growth prediction (amm.com, July 10).
A third producer said he had seen a slight "relaxing" in automotive demand for September orders. However, he noted that its not unusual for auto suppliers to perform inventory checks at this time of year, which results in fewer orders.
The lack of spot billet in the market is likely to keep premiums high for now, and producers expect supply to remain tight next year as well.
"Very little offshore billet has come to the rescue (in North America this year). (And) I dont see how that situation will improve next year," the third producer said.