NEW YORK Consumer
declarations for January are showing that demand is slightly
higher than usual, one aluminum ingot trader told
"Were already starting to
get Januarys consumption declarations from customers, and
theyre 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
theyve done for 2013 are "trickling towards the high
end," although its 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
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. Its the end of the year," a second trader
"Business is slow. Whatever
business is out there will be squirrely between now and the end
of the year," the first trader agreed.
"Its that time of year
when everyone is watching inventories and come January
theyll replenish. Youll see a spike and P1020
premiums will strengthen. But right now, if someone has to
unload, youll see discounts," the buyer said.
"Its incredibly quiet," a
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