Shipment Interruptions Drive US Aluminium Sheet Prices Higher

New Delhi: Aluminium Sheet prices increased in the US market in the week ending January 27 due to limited product availability and a higher downstream demand outlook. According to market participants, premiums for Aluminium Ingot in western markets have risen this month on speculation that rising Chinese demand following the Lunar New Year holiday will tip the balance against tight supply levels caused by western production curtailments. However, given several persistent headwinds, some Aluminium Sheet market participants have warned that such expectations may be overly optimistic. Premiums initially rose this month, owing to expectations of slightly higher demand this year. The increases in Aluminium Ingot were then accelerated in response to sustained supply issues of Aluminium Sheets following a series of smelter curtailments last year and rising demand expectations surrounding China's return. The number of premiums in the United States is rising as Aluminium Sheet buyers seek to attract more metal.

According to our sources, China accounts for nearly 60% of global supplies, which reached a new high last year as a result of newly launched capacity and the relaxation of power supply restrictions. Rising Chinese Aluminium sheet supplies are lowering metal benchmark prices, but regional cost variations have emerged as the European energy crisis curtails production and demand in the United States. Aluminium Sheet purchasers pay a premium over the benchmark price of aluminium in the physical market, which typically includes transportation and handling costs as well as taxes. The European duty-paid premium, at USD 279/MT, is roughly in line with the USD 281/MT at the start of the year, while it is trading at USD 595/MT in the United States, up nearly 15% since the beginning of January.

One of the administrators of Nebraska's Driver and Vehicle Records Division stated that due to a nationwide shortage of Aluminium Sheets, they would be unable to distribute all of the new license plates to some counties in Nebraska before the old plates expired. As a result, Nebraskans looking to update their license plates may have to wait longer for Aluminium Sheets in some areas. The Platte County Treasurer's Office reports that at least a dozen counties appear to be experiencing delays in receiving Aluminium Sheet for producing license plates due to supply chain problems.

As a result of the significant tightening of supply, ChemAnalyst anticipates that the price of Aluminium Sheet will rise in the coming weeks. Premiums will also fall if China remains sluggish in its trading activity beginning next week.