P1020 aluminum imports fall slightly in June; logistics remain challenging

Imports of primary unalloyed aluminum into the US fell by 2.5% in June, month on month to 139,548 mt, even as shipments from Canada were up 13.9% to 122,686 mt, according to US Census Bureau data released on Aug. 5.

Total P1020 imports are still down 32.2% year on year.

Shipments of higher purity from origins like the UAE, Russia and India rose by 29% month on month, as logistical issues and regional tightness due to premiums persisted. Replacement costs in the US are around 34 cents/lb to 36 cents/lb according to market sources. Those high purity sows from the UAE are still down around 50% year on year through June.

As the arbitrage from Asia has opened slightly but long queues out of LME warehouses and ocean freight remain challenging, market sources added.

Market sources have also said concerns around trucking remain as certain warehouses such as Owensboro, Kentucky, remains tighter than others such as Toledo, Ohio. Rising concerns on the Canadian border guard strike will cause a slowdown in metal moving by rail and truck.

The same data showed total primary aluminum imports under HTS code 7601 were 295,058 mt, down 29% month on month but up 12%% year on year.

Shipments of P1020 or greater purity from Canada reached 122,686 mt but were still down 34.49% year on year. Shipments by rail were down 45.91% year on year at 59,721 mt, while shipments by water were down 16.88% to 59,383 mt. Exports of P1020 from British Columbia to the US were 9,208 mt, up 69.54% year on year.

Exports from British Columbia will be affected going forward due to the Unifor Union strike at Rio Tinto's BC Works smelter, as the company has cut production by around 35% due to labor issues.

Canadian P1020 imports accounted for just under 88% of US unalloyed imports for June and 72.37% of the previous 10-year average for the same month.

Imports of ingot from Australia ticked back down by 24.8% month on month to 3,352 mt. Imports from New Zealand were seen at 172 mt during the month, the imports accounted for some of the flow of high purity ingot, P0404, to the US West Coast.

The Platts US Midwest premium reached a record high of 34 cents/lb on July 30 and has held there since, on tight supply, rising freight costs and solid demand expectations through the summer. Along with the uncertainty added to the market from smelter strike, Canadian border guard strike and the Russian export tax.

Imports of value-added products, such as billet, foundry alloys and slabs, were up 176.68% year on year in June, as demand continued to firm. Shipments from Canada, the UAE, Russia and India rounded out the top four as June totaled 155,510 mt, which was down 24.8% month on month.

Imports from Canada of billet, slabs and foundry alloys to the US totaled 95,421 mt, up 185.68% year on year, as alloyed aluminum from Canada could flow into the US duty free and would not fall under the USTR guidance import levels that were set in 2020. Year-to-date imports of slab from Canada were up just over 85% as the tightening scrap market has forced some mills to go out into the spot market for more primary and slab to keep the chemistry mix of products.

Imports of value-added products from Russia continued to flow into the US — up just under 47% year on year through June.

Platts US spot 6063 billet upcharge hit 26 cents/lb on July 22, a record high, and has held there since.