American Metal Market is proposing to launch a weekly assessment of a US cost insurance and freight (cif) premium for aluminium shipped into the port of Baltimore.

Following a consultation with market participants regarding a proposal to launch a duty-unpaid (DUP) premium assessment for the US Midwest, American Metal Market has learned that the infrequency of DUP transactions makes such an assessment untenable.

However, market participants say that there is a need for a cif premium assessment in the US market. Trader sources in particular use cif premiums when negotiating business with other traders for imported material prior to duties being assessed on the shipment. The traders buying the metal on a cif basis then often parse the purchase into smaller lots, usually sold to consumers on a US Midwest duty-paid basis.

Any cif transactions concluded in different East and Gulf Coast locations would be normalized to Baltimore under American Metal Market’s proposal.

Pending feedback, the cif premium would be assessed once per week, on Tuesdays.

American Metal Market will continue to publish assessments for the US Midwest aluminium P1020 premium on a duty-paid basis twice per week (Tuesdays and Fridays), but would rename it to denote that it is "duty-paid." The new name would be "aluminium P1020 duty-paid premium delivered Midwest cents/lb" or "aluminium P1020 Midwest duty-paid premium." 

In addition to a cif premium, American Metal Market is proposing to launch a daily calculation of an all-in, or free-market, aluminium price, which comprises the London Metal Exchange (LME) cash aluminium PM bid price plus the cif Baltimore premium. 

This consultation will close on Monday September 7. Based on feedback collected during the consultation period, the above-mentioned assessments would take effect on Tuesday September 11.

Below are the specifications for the new prices proposed by American Metal Market:

Aluminium P1020 cif Baltimore ports premium 
Type: Assessed range 
Frequency: Once weekly 
Basis: Shipped to ports in Baltimore, Maryland, premium on top of London Metal Exchange cash prices, net back to Baltimore 
Grade: P1020A or 99.7% minimum aluminium purity (silicon 0.10% maximum, iron 0.20% maximum) 
Currency: US cents 
Unit: Per lb 
Minimum lot size: 100 tonnes 
Payment terms: 30 days, other payment terms normalized 
Form: Ingot

Aluminium P1020 cif all-in free-market price:
Type: Calculated
Frequency: Daily 
Formula: London Metal Exchange cash aluminium PM bid price plus American Metal Market's P1020 premium cif Baltimore ports
Basis: Delivered consumer works Midwest US, premium on top of LME cash prices, net back to Baltimore 
Grade: LME specification P1020A or 99.7% minimum aluminium purity (silicon 0.10% maximum, iron 0.20% maximum, zinc 0.03% maximum, gallium 0.04% maximum, vanadium 0.03% maximum) 
Currency: US cents 
Unit: Per lb 
Minimum lot size: 100 tonnes 
Payment terms: 30 days, other payment terms normalized 
Delivery window: Within four weeks 
Form: Ingot 

To provide feedback on this proposal, or if you would like to provide price information by becoming a data submitter, please contact aluminium reporter Kirk Maltais at pricing@metalbulletin.com. Please add the subject heading FAO: Kirk Maltais, re: cif Baltimore aluminium premium.

To see all of American Metal Market’s pricing methodology and specification documents, click here.

American Metal Market has no financial interest in the level or direction of the assessment.