US Aluminum: Midwest Premium Steadies At Higher Levels

NEW YORK (Dow Jones)--The U.S. Midwest prompt aluminum premium over London Metal Exchange cash prices remains roughly the same as during the middle of last month, when it hit 5 cents for the first time since May 2008. Observers put the premium around 4.8 to 5 cents, compared with a 4.75-to-5-cent range in mid-June. One trader put the premium around 4.9 cents, saying there is a shortage of scrap, and destocking is coming to an end at service centers. "There's some pickup in demand for some products," he said. Another trader put the premium between 5 and 5.5 cents depending on whether the metal is for a July or August sale. He said there currently isn't a lot of spot metal in the market. "We continue to see spot [market] tightness [and] incipient growth in underlying aluminum demand," said Jorge Vazquez, aluminum analyst with Harbor Intelligence, who put the premium between 4.8 cents and 5 cents. However, because of continued economic uncertainty, "we are seeing strictly hand-to-mouth demand, which is limiting the increase in the Midwest premium," Vazquez said. On Friday, LME cash aluminum was officially quoted at $1,532.00 to $1,534.00 per metric ton, or about 69.49 cents to 69.58 cents per pound. Inventories of aluminum stored in LME warehouses fell 2,425 metric tons to 4,393,600 from Thursday to Friday. The total is down from 4,400,725 metric tons one week ago.