NEW YORK — Consumer declarations for January are showing that demand is slightly higher than usual, one aluminum ingot trader told AMM.

"We’re already starting to get January’s consumption declarations from customers, and they’re better than we expected," the trader said.

Typically, buyers have an option to take between 2,000 to 4,000 tonnes per month of contracted material, and this trader said most of the existing deals they’ve done for 2013 are "trickling towards the high end," although it’s still very early, he said.

A buyer agreed that so far, the first quarter is looking promising. "The first quarter looks strong. Automotive is strong, aerospace is solid, construction is picking up (post-Sandy) and consumer spending is good," the buyer said.

Sluggish spot markets kept Midwest aluminum premiums steady at 10.5 to 11.5 cents per pound Wednesday, with little concluded business reported as market participants aim to keep inventories as lean as possible heading into year-end.

"There are discounts out there for sure. It’s the end of the year," a second trader said.

"Business is slow. Whatever business is out there will be squirrely between now and the end of the year," the first trader agreed.

"It’s that time of year when everyone is watching inventories and come January they’ll replenish. You’ll see a spike and P1020 premiums will strengthen. But right now, if someone has to unload, you’ll see discounts," the buyer said.

"It’s incredibly quiet," a producer added.

Despite the weakness in spot business, most agree that the amount of aluminum tied up in financing deals and queues in London Metal Exchange-registered warehouses will continue to support premiums.

On Tuesday, global inventories rose to 5.178 million tonnes, up from 5.174 million tonnes a day earlier, following large deliveries into warehouses in Detroit and Singapore.

"The only real obstacle is the fiscal cliff. But I think both prices and premiums will be steady to higher," the first trader said.

"Will the (warehousing) cycle continue next year? Probably. Premiums could easily stay at 11.5 (cents) next year," the second trader said.

"If we get by (the fiscal cliff), things look good in the first quarter. In the States we could see a strong 11- to 11.5-cent-per-pound premium," the buyer said.