BRAZIL ALUMINIUM SNAPSHOT: Domestic premiums drop in the week; poised to fall further

Key data from August 19 pricing session.

Key data from August 19 pricing session.

P1020A ingot delivered São Paulo region ($ per tonne)

Today Previous Change to
midpoint of range
Midpoint
% change
370-450 400-470 -25 -5.7

Key drivers
– Domestic premiums dropped, adjusting to the low level for imported metal; poised to fall further in the short term, sources said.
– Factors such as China’s slowdown, volatile spreads and excess of available metal weighed on premiums.
– Despite the weakness of aluminium demand in Brazil, activity picked up in the week and some large-volume deals were concluded (see trade log below).
– Brazil’s shrinking economy continues to hit the industry; sources report more lay-offs, high levels of idled capacity.

Key quotes
“It does not make sense for the metal to be so expensive within Brazil if one can import it at much lower levels. Whoever wants to sell now will have to adjust the premiums.” – Buyer

“The end-user demand remains nearly frozen, but even so eventually you reach a point when companies need to buy more metal. Activity improved a bit, but there are still a lot of people waiting to see what happens.” – Trader

Trade log

August 20

– 24 tonnes of aluminium ingot sold at $470 per tonne, delivery not included, to be collected in two lots of 12 tonnes each
– Over 2,000 tonnes of aluminium ingot delivered São Paulo region sold at $265 per tonne premium
– 3,000 tonnes of aluminium ingot sold on a cif Brazil basis at $179 per tonne premium
* Please note that the information on these deals was received after this week’s pricing session was concluded.

For previous 2015 aluminium trade logs, please click on the relevant month:
January
February
March
April
May
June
July

Click here for Metal Bulletin’s P1020A ingot delivered São Paulo region premium specifications.
Click here for Metal Bulletin’s P1020A ingot sold on a cif Brazilian ports basis premium specifications.

Danielle Assalve 
danielle.assalve@metalbulletin.com
Twitter: @dassalve_MB