US P1020 imports fall as supply remains tight

Primary unalloyed aluminum imports into the US were down 12% month on month in December to 149,577 mt, as shipments from Canada fell by 24% to 110,660 mt, according to US Census Bureau data.

Total P1020 imports for full-year 2021 fell 10.49% to 1.68 million mt on the year, the data, released late Feb. 9, showed.

Shipments of higher purity from origins like the UAE and Russia were up 54% month on month in December as logistics still remain challenging to end the year. The high-purity sows from the UAE were still down around 34% year on year.

Market sources also said barging to some warehouses like Owensboro, Kentucky, had improved and metal had been flowing in and out as traders had tried to buy into New Orleans, while other Southern and Atlantic warehouses remained tight compared with Toledo, Ohio.

Just over 25,000 mt were seen imported into New Orleans from Rotterdam, in which the units were sows and t-bars and of Canadian origin, according to Panjiva data, a division of S&P Global.

The same data showed total primary aluminum imports under HTS code 7601 were 318,413 mt in December, down 6% month on month and up 38.4% year on year.

Direct shipments of P1020 or greater purity from Canada were down 11.37% year on year for full year 2021. Along with just over 50,000 mt of Canadian origin sows and t-bars moving from Rotterdam to New Orleans and Baltimore.

Shipments by water were down around 37% in December, while shipments by rail fell seven month on month.

Exports of P1020 from British Columbia to the US fell to 5,773 mt, up from 4,773 mt in November.

Canadian P1020 imports accounted for just under 74% of US unalloyed imports for December and 74.01% of the previous 10-year average for the same month. Nearly all of that material is produced by hydro-powered smelters and is considered low carbon and fall around or below the 4 mtCO2/t level across Scope 1 and Scope 2, as Canada continues to sell into the US at duty-paid premium levels supporting the all-in of their aluminum. S&P Global Platts nature-based carbon credits prices have risen almost 229% through Feb. 10 since their launch on June 14.

Imports of ingot from Australia ticked up by 210% month on month to 15,670 mt in December. Once again no imports from New Zealand were seen 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 continued to move to all-time highs, last assessed at 35.65 cents/lb on Feb. 9, as traders are looking for spot tons to meet consumer demand as carry spreads remained in a backwardation as inventories remain lean on tight supply.

Market sources have indicated that producers have shifted some production back toward P1020 and away from value-added products as automotive demand remains stagnant.

Three-month prices on the London Metal Exchange continue to trade above the Oct. 15 highs and have held its backwardation after rallying almost 33% from the Nov. 5 low, along with the Midwest premium futures

Demand is expected to remain firm in 2022 along with ongoing regional tightness in aluminum supply.

VAP demand remains strong

Imports of value-added products, such as billet, foundry alloys and slabs, were up 23% year on year in December, as the demand outlook remained steady. Shipments from Canada, the UAE, Russia and Bahrain rounded out the top four as November totaled 168,836 mt, up 0.12% month on month.

Imports from Canada of billet, slabs and foundry alloys to the US during the month totaled 87,092 mt, up 6.94% year on year, as alloyed aluminum from Canada could flow into the US duty-free.

Full-year 2021 imports of slabs from Canada were up just over 48% as the prime scrap market remained tight and has forced some mills to approach the spot market for more primary and slab to keep the chemistry mix of products, and as mills look to utilize more scrap in the push to decarbonization.

Imports of industrial aluminum scrap were up 71% year on year for 2021, while imports of used beverage cans were up 37%. Exports have also picked up again in December, up 94% year on year.

Imports of VAP from Russia continued to flow into the US — up around 78% during 2021

The Platts US spot 6063 billet upcharge reached a record high of 30 to 34 cents/lb on Jan. 27, as producers are trying to tack on surcharges for hardeners to offset the high input costs such as silicon and magnesium.