US P1020, VAP imports tick back up in March

Primary unalloyed aluminum imports into the US totaled 140,8377 mt in March, up 4.5% from February, as shipments from Canada dropped 4.2% to 82,850 mt, according to the US Census Bureau data.

Total P1020 imports from January through March jumped 46.39% to 464,675 mt, the data showed.

Shipments of higher purity aluminum from origins like the UAE were up 118.4% in March from February as logistics still remain challenging, especially at the ports. Higher purity imports from Russia ticked back up to 16,719 mt as those were done ahead of the country's invasion of Ukraine.

Market sources also said barging to some warehouses like Owensboro, Kentucky, remains tight as traders had tried to buy into New Orleans, while other Southern and Atlantic warehouses are seeing more congestion.

Imports of P1020 coming into Detroit were at 24,646 mt for March, combined with 23,246 mt coming into Baltimore and 12,471 mt coming into New Orleans during the same period, recent data showed.

The same data showed total primary aluminum imports under HTS code 7601 were 341,563 mt in March, up 29.8% from February and up 10.68% from year-ago levels.

Shipments of P1020 from Canada by water were down about 18% in March, while shipments by rail rose 3.6% month on month.

Exports of P1020 from British Columbia to the US rose to 9,705mt, up from 6,818 mt in February.

Canadian P1020 imports accounted for about 59% of US unalloyed imports for March and 67.04% of the previous 10-year average for the same month. Nearly all of that material is produced by hydropower smelters and is considered low carbon, and fall around or below the 4 mtCO2e level for every metric ton across Scope 1 and Scope 2, as Canada continues to sell into the US at duty-paid premium levels supporting the all-in of its aluminum.

Imports of ingot from Australia totaled 18,457 mt in March, down 26.6% from February. The imports, some 59% in February, accounted for some of the flow of high-purity ingot, greater than 99.8%, to the US West Coast and Houston.

S&P Global Commodity Insights last assessed the Platts US Midwest premium at 38.35 cents/lb May 9, falling from the record hit March 29, as some traders have lowered offers due to their customers being fully committed.

Three-month prices on the LME continue to trade above the Nov. 5, 2021, low, though falling under macroeconomic pressure and supported by demand ex-China, with contangos supporting Midwest premium futures.

Demand is expected to remain firm in 2022, although some have expressed concerns of macroeconomic effects on demand going forward, along with ongoing regional tightness in aluminum supply.

VAP imports strong

Imports of value added products, such as billet, foundry alloys and slabs, fell 8.74% year on year in March as the demand outlook remained steady. Shipments from Canada, the UAE, Russia and Bahrain rounded out the top four as March totaled 200,726 mt, up 56.3% from February.

Imports from Canada of billet, slabs and foundry alloys to the US during the month totaled 100,849 mt, down 8.74% year on year, as alloyed aluminum from Canada could flow into the US duty free.

Imports of slabs from Canada during March were up just more than 7% as the prime scrap market remained tight. This has forced some mills to approach the spot market for more primary and slab to keep the chemistry mix of products, as they look to utilize more scrap in the push to decarbonization.

Imports of industrial aluminum scrap were up 33.59% so far for 2022, while imports of used beverage cans were down 8.76%. Exports have also picked up again, up 66.2% year on year.

Imports of VAP from Russia continued to flow into the US in 2022 and were up 41.67% from year-ago levels to 19,415 mt.

The Platts US spot 6063 billet upcharge has held at 32 to 35 cents/lb, just below the record high, as producers were trying to tack on surcharges for hardeners, such as silicon and magnesium, to offset high input costs.