CHICAGO Aluminum billet
premiums remained unchanged in the past week despite
limited spot deals booked at higher prices.
One producer source said his
company had recently booked a deal for about 400 tonnes
(881,849 pounds) at 12.75 cents per pound, while a second
producer said his company had booked 400,000 pounds for April
delivery at 13 cents per pound.
But other sources contacted by
AMM said they had conducted no spot business lately,
and even if they had they would be still be looking for
premiums in the range of 12 to 13 cents.
billet premium remains unchanged at 12 to 13 cents per
Several producers said they have
no spot availability until April.
Some market sources speculated
that billet prices and premiums could shoot up if theres
a production disruption at the Aluminerie de Becancour Inc.
(ABI) smelter in Quebec, noting that if the smelter were to
shut it could be months before production resumes. But
expectations of a supply squeeze havent yet translated
into higher spot prices.
A third producer source said
some of his customers, who are also supplied by ABI, had
approached him about potentially increasing their usual
purchases. He said his company might be able to make additional
capacity available if necessary, but that any disruption would
likely be "painful in the short term."
An extruder said his company had
been buying extra material since November, when the previous
ABI labor contract expired. But even with that additional
material, he said his company would have a cushion of just a
Some buyers might have become
complacent about ABI as talks between the company and the
United Steelworkers union dragged on, the first producer source
speculated. After pre-emptively building inventories and being
caught long in late 2012, they might have reversed course and
whittled down supplies too far going into 2013, he said.
Yet while questions about ABI
loomed over the market, participants generally said demand
continues to rebound after a slow start to the yeara
trend similar to last years, but one that could have more
upside potential in 2013 given a potentially healthier
Workers at Alcoa Inc.s
majority owned ABI have been asked by a USW negotiating
committee to reject the companys final contract offer. A
vote is scheduled for Feb. 12 and Feb. 13 (
amm.com, Feb. 7). Pittsburgh-based Alcoa and the
union have been trying to renew a labor contract covering 900
workers at the 400,000-tonne-per-year smelter since September
amm.com, Jan. 4).