Winter Park, Florida 27/06/2016 - The weakness in the US aluminium market extended into another week, with the nearby months of the CME Aluminum MW US Transaction Premium (AUP) contract dipping to seven cents per pound.
After a rare week with no trades, AUP saw 1,765 lots or 44,125 tonnes transacted in the week ending June 24. Open interest, meanwhile, hit a new all-time record of 30,434 lots or 760,850 tonnes, an increase of 1,405 lots or 4.8 percent.
The forward curve has moved into a deeper backwardation. The June AUP contract settled on Friday at 7.643 cents per pound, down one percent week-on-week, while each month from July to December closed at 7.0 cents, down 3.4 percent. Every month in 2017 is between 7.2 cents and 7.35 cents.
Aluminium premiums have been trending lower for the past two months because spot demand has slowed while imports continue to arrive in bulk.
Aluminium imports of ingot, scrap and mill products into the US and Canada (excluding cross-border trade) totalled 695 million pounds or 315,000 tonnes in April, up 14.5 percent year-on-year, according to the Aluminum Association.
Imports in the first four months of the year at 2.486 billion pounds (1.12 million tonnes) were up 10.1 percent on the same period of 2015 while imports slipped 0.7 percent to 1.923 billion pounds (872,000 tonnes), the trade group added.
"Everything is steady but there's no reason to feel too optimistic moving forward," said a US trader, who expects the US Midwest premium to fall below 7 cents in the near term.
(Editing by Mark Shaw)