February Aluminum Update

  • 2 Mar 2018
  • By CME Group
  • Topics: Metals

Aluminum Updates

  • Open interest across all CME aluminum products reached all-time high of 68,974 contracts on 28 February.
  • Aluminum MidWest U.S. Transaction Premium Platts Futures has seen a steep rally in price since December 2017. AUP March18 futures rose by 46% to the high of 0.1675 $/lb on 20 February. AUP contract traded on average 760 lots (~19K mt).
  • The long-dated volume has picked up across all aluminum premium contracts with open interest in European Duty-Paid and Duty-Unpaid Premium (Metal Bulletin) as well as Aluminum Japan Premium (Platts) Futures started to build out till December 2019.
  • China’s General Administration of Customs released preliminary trade data for January. Aluminum unwrought exports increased by 14.3% YoY to 445,000 mt, up from 440,000 mt in December 2017, highest since the 2nd half of the last year. [Source: Reuters https://www.reuters.com/article/china-trade-commodities/table-china-preliminary-january-commodity-trade-data-idUSL4N1PY2K9 ]
  • According to the International Aluminum Institute, 63,385K mt of primary aluminum was produced in 2017 globally, up 6% YoY. China reported to produce 32,255K mt while unreported production by the country was estimated at 3,650 mt, in total accounting for 57% of global production. [Source: International Aluminum Institute http://www.world-aluminium.org/statistics/primary-aluminium-production/ ]
  • On 16 February 2018, the U.S. Department of Commerce found that the quantities and circumstances of aluminum imports “threaten to impair the national security,” as defined by Section 232. The proposed recommendations include introduction of import tariffs and / or quotas on primary aluminum and some aluminum products (e.g. plate, sheet, tubes and foil). The U.S. President is required to make a decision on the aluminum recommendations by 19 April 2018 [Source: https://www.commerce.gov/news/press-releases/2018/02/secretary-ross-releases-steel-and-aluminum-232-reports-coordination]
  • There has been downward pressure on the costs of producing primary aluminum. March 2018 futures on alumina, one of the three major components, dropped to 355 $/mt, down by 8% since beginning of February, while power and carbon costs also softened.

Aluminum Premium Futures Price Performance:

  • Regional Aluminum premium futures are driven by the different fundamental factors, thus, creating arbitrage opportunities.

Aluminum Premium Futures Month-on-Month Change in Forward Curve and Open Interest

Monthly Aluminum premium volumes

Aluminum Inventory Movements

Date Total Inventory Eligible Registered
02/28/2017 21,851
18,779 3,072
50,755 50,704 51
65,327 65,276 51
MoM Change, % 29% 29% 0%
YoY Change, % 199% 248% -98%

Source: CME. Data as of 28 February 2018

Disaggregated Commitment of Traders Report

Alumina Futures

If you have any questions or would like more information regarding this weekly communication, please contact metals@cmegroup.com.

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