NEW YORK Aluminum P1020
market players remain mixed over how the resolution of the
fiscal cliff standoff will impact markets in 2013.
Although global markets reacted
favorably to Congress avoiding falling off the cliffthe
London Metal Exchange three-month aluminum price bumped up 3.6
percent to $2,145.50 per tonne Thursday from $2,071.50 on Dec.
31sources are skeptical this trend will continue,
maintaining that issues such as spending and the debt ceiling
still need to be resolved.
"I dont think the fiscal
situation has been solved. They only covered taxes; they
havent covered spending, and that has to be addressed,"
one trader told AMM.
While equity markets reacted
favorably Wednesday, this does not mean U.S. markets are out of
the woods yet, a second trader said.
"Once this excitement, if you
can call it that, (cools down) well probably see some
drifting down of (aluminum) prices," a third trader said.
"(Congress) didnt solve the problem."
A producer source disagreed.
"From an industrial point of view, it can only help demand. It
brings more certainty," he said.
Although demand could benefit as
a result of the deal, it has not inspired so much confidence
that producers and extruders will rush to expand capacity, the
second trader said. "No one is going to make any business
decisions based on this fiscal cliff resolution. I dont
think theres anyone out there saying, Weve
resolved the fiscal cliff, so lets crank up the presses
and hire more people. Everyone in this industry is
reactionary. They only add people when their customers order
more. And when I say order more, I mean order morenot
thinking about ordering more."
The third trader agreed.
"Investors will grow weary about the uncertainty again, and
this positive feeling will fade," he said, adding that most of
his consumers remain cautious. "They all still have a
Few spot deals were closed this
week, keeping Midwest premiums at between 10.5 and 11.5 cents
"We did some business in the
11-cent range (this week)," the third trader said. "But most of
our consumers are covered for January and a little hesitant to
book additional business. They just dont know how January
will shape up yet."
"We havent done much,
its still a ghost town," the producer source said.
"This week, people are just
trying to sort themselves out, exchanging 'Happy New Years' and
getting rid of the last effects of the hangovers," the second