CHICAGO Midwest aluminum
premiums held steady over the past week, even as some market
players questioned whether demand is showing signs of
"It has been slow out there. ...
Were still seeing some decent business, but the phones
arent ringing off the hook, thats for sure," one
aluminum trader said.
Midwest premium remained unchanged this week at between 11.35
and 12 cents per pound.
The trader said he couldnt
pinpoint exactly what might have caused the apparent slowdown,
noting that it hasnt been severe enough to translate into
"Were in the same boat
weve been in for about the last two weeks," a consumer
source agreed, characterizing business as coming in "dribs and
drabs," with premiums staying flat.
But others said that consumer
confidence might be taking a hit, and reluctance to buy might
be starting to affect producers of aluminum and aluminum
"Consumers just dont have
as much money to spend," one market source said. "Car sales
have been good but not as strong (as) some thought they might
be. You keep hearing that housing starts are great. But are
they? And ... the guy who was talking about home improvements
and going to Home Depothe isnt."
Thanks to comparatively strong
automotive demand, foundries making aluminum wheels are doing
well, the market source said. But distributors, extruders and
rolling mills might be seeing business "quiet down," he
While requirements from
end-users might be less than had been expected, other factors
are expected to bolster demand and premiums, the market source
said. The easing of a backwardation on the London Metal
Exchange, for example, could provide a boost in financing
deals, he said.
In addition, winter storms in
the United States may help keep prices stubbornly high for some
grades of scrap despite continued declines in aluminum tags on
the LME, the market source said. That should make P1020
attractive to potential buyers who might otherwise look to
scrap to meet their needs, he reasoned.
The LMEs cash primary aluminum contract ended the
official trading session at $1910.5 per tonne March 7, down
almost 1 percent from the previous day and off 2.5 percent week