The U.S. Midwest prompt aluminum premium over London Metal Exchange cash prices was 3.5 to 4 cents over the last week, traders say.
This is in line with a week ago, when traders and analysts had listed a wider band of 3.25 to 4.5 cents but said the bulk of the activity was closer to 3.5.
The premium is being held back by slow sales, traders said. However, it is not falling further as it is already historically low, one added.
"It seems to be in a 3.5- to 4-cent neighborhood," said one dealer. "U.S. sales are off. Automotive and housing are all slow. They have spare capacity and nobody seems to be doing much on the primary, unfortunately."
The premium nevertheless is holding up since it is low, the dealer continued.
"It probably costs more than that to ship it from most smelter locations to the customers. It's not jumping higher because there is not enough demand to push it, for the moment."
Another trader put the premium mainly around 3.5 cents but listed a range of 3.5 to 4 cents.
"Premiums have pretty much stayed where they have been," he said. "The industry has been pretty much quiet on the physical side. I don't believe any of the traders nor manufacturers are offering their metal back into the market. That has been done."
LME cash aluminum was officially quoted at $2,772.50 to $2,773.50 per metric ton Wednesday, or about $1.2574 to $1.2578 per pound.
Inventories of aluminum stored in LME warehouses rose 3,925 metric tons to 805,950 from Wednesday to Thursday. The total is up from 798,000 metric tons one week ago.
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