HARBOR's MW spot Premium between consumers and suppliers increased last week to 6.70–7.40 cent/lb from 6.60 -7.30 /lb. MW P1020 spot premium for consumer-supplier and supplier-supplier transactions remain inside its long-term equilibrium range (5.5–7.5 cent/lb) once adjusted properly for discounts on published journalistic references, freight, shape, purity, and credit terms. However, the following factors could influence the MW premiums over the next few weeks:
a) The nearby backwardation has evaporated while Cash–3M spreads are now in a wide enough contango for traders to roll over expiring positions and for traders to look for freshly produced units.
b) Inland freight costs are on the rise because of produce season, the scarcity of truck drivers (Midwest and West Coast), reported congestions/delays in some ports (East Coast), and the closure this week of key ports due to Hurricane Harvey (Houston and Lake Charles).
c) Hurricane Harvey’s effect on P1020 spot demand and psychology. Historically, demand for aluminum products increase in the months following a significant weather-related event, particularly the spot demand for P1020 units. Moreover, these types of events provide a rationale for suppliers of metal to raise premiums.
d) We have just entered the seasonal period that has historically resulted in an upturn for premiums.
Aluminum Highlights
Week Ending: September 1, 2017An update on industry activity and economic indicators
August 21 – Estimated shipments of Aluminum Forgings and Impacts by U.S. and Canadian producers totaled 26.1 million pounds during July 2017, off 5.9 percent from the July 2016 total of 27.8 million pounds. Compared to the previous month, shipments decreased 15.6 percent from the June 2017 total of 30.9 million pounds. Year-to-date shipments through July 2017 totaled 207.8 million pounds, up 11.9 percent over the 2016 year-to-date total of 185.7 million pounds.
September 1, 2017
August 30 – Preliminary estimates indicate that aluminum demand in the United States and Canada (shipments by domestic producers plus imports) totaled an estimated 13,890 million pounds through the first half of 2017, up 4.1 percent over the same period last year. Demand for semi-fabricated (mill) products totaled 9,951 million pounds, up 5.8 percent. Apparent consumption (demand less exports) in domestic markets totaled an estimated 12,413 million pounds, up 5.3 percent year-over-year.
August 31 – Aluminum net shipments (including exports) by domestic U.S. and Canadian facilities totaled an estimated 1,803 million pounds during July, up 1.1 percent over the July 2016 total of 1,784 million pounds. Shipments of aluminum mill products increased 2.1 percent over the previous year to 1,314 million pounds, while shipments of aluminum ingot for castings, exports and destructive uses were off 1.4 percent year-over-year, totaling 489 million pounds. Through the first seven months of 2017, preliminary producer shipments totaled 13,989 million pounds, up 2.1 percent over year-to-date 2016. July inventory levels totaled an estimated 2,991 million pounds, up 1.7 percent over the previous month and an increase of three-tenths of one percent year-over-year.
August 23 – Sales of new single-family houses in July 2017 were at a seasonally adjusted annual rate of 571,000, according to estimates released jointly by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 9.4 percent below the revised June rate of 630,000 and is 8.9 percent below the July 2016 estimate of 627,000. The median sales price of new houses sold in July 2017 was $313,700. The average sales price was $371,200.
September 1, 2017
August 30 – U.S. real gross domestic productincreased at an annual rate of 3.0 percent in the second quarter of 2017 according to the "second" estimate released by the Bureau of Economic Analysis. In the first quarter, real GDP increased 1.2 percent. BEA emphasized that the second-quarter advance estimate released today is based on more complete source data than were available for the "advance" estimate issued last month (+2.6%). The increase in real GDP in the second quarter reflected positive contributions from PCE, nonresidential fixed investment, exports, federal government spending, and private inventory investment that were partly offset by negative contributions from residential fixed investment and state and local government spending. Imports, which are a subtraction in the calculation of GDP, increased.
August 31 – In the week ending August 26, the advance figure for seasonally adjusted initial claims was 236,000, an increase of 1,000 from the previous week's revised level. The previous week's level was revised up by 1,000 from 234,000 to 235,000. The 4-week moving average was 236,750, a decrease of 1,250 from the previous week's revised average. The previous week's average was revised up by 250 from 237,750 to 238,000. An initial claim is a claim filed by an unemployed individual after a separation from an employer.
September 1 – The U.S. Census Bureau of the Department of Commerce reported that the annual rate of construction spending during July 2017 totaled an estimated $1,196.8 billion, seasonally adjusted, down seven-tenths of one percent month-over-month, but up six-tenths of one percent over the July 2016 estimate of $1,189.8 billion. Residential construction ($505.6 billion seasonally adjusted annual rate) decreasedsix-tenths of one percent month-over-month, but was up 7.5 percent year-over-year. Nonresidential construction was at a seasonally adjusted annual rate of $691.2 billion in July, off eight-tenths of one percent from June 2017 (-3.9% y/y). Construction spending through the first seven months of 2017 amounted to $691.2 billion, 4.7 percent above the $659.9 billion ytd in 2016.
September 1, 2017
September 1 – Total nonfarm payroll employment increased by 156,000 in August, below the average monthly gain of 176,400 over the prior 12 months, the U.S. Bureau of Labor Statistics reported. The unemployment rate increased slightly over the July rate to 4.4 percent while employment increased in manufacturing, construction, professional and technical services, health care, and mining. Manufacturingemployment increased by 36,000 jobs, the sector's eighth gain in the last nine months and largest since August of 2013. That brings the average monthly change for the sector to 11,500 additional jobs over the last 12 months. In total, manufacturing employment has increased by roughly 138,000 jobs over the last year.
August 31 – Statistics Canada report that real GDP in Canada increased three-tenths of one percent in June, the eight consecutive monthly increase. The output of goods-producing industries rose five-tenths of one percent, while service producing industries edged up two-tenths of one percent. Total manufacturing output increased two-tenths of one percent. Durable-goods manufacturing increased nine-tenths of one percent as 6 of 10 subsectors grew. Leading the growth was machinery (+3.9%), furniture and related products (+3.7%) and primary metal (+2.0%).
September 1 – Preliminary data published by Ward's Automotive show that actual U.S. light vehicle sales totaled 1.48 million units during August 2017, down 2.1 percent year-over-year. The daily sales rate in August was 54,631 over 27 days, 5.7 percent below the 2016 rate of 57,932(26 days). Through the first eight months of 2017, sales totaled 11.286 million units, 2.8% below like-2016’s 11.617 million. August’s seasonally adjusted annual rate of 16.0 million units was the lowest SAAR since 15.6 million units in February2013. The year-to-date SAAR stood at 16.8 million units, down from 17.3 million in both the same periods in 2016 and 2015.
September 1, 2017
August 21 – According to data collected by the International Aluminium Institute and the Aluminum Association, the global primary aluminum production rate totaled an estimated 59.0 million tonnes in July 2017, off 6.5 percent from the June 2017 rate, but an increase of seven-tenths of one percent over the July 2016 rate. Actual production in July totaled an estimated 5.01 million tonnes, down 3.4 percent month-over-month. The annual production rate in North America (U.S. and Canada) increased four-tenths of one percent m/m, but was off six-tenths of one percent y/y. In China, the annual rate of production declined to 31.6 million tonnes, off 11.3 percent m/m, but up seven-tenths of on percent y/y. In the Rest Of the World, the annual production rate in July 2017 was down two-tenths of one percent m/m, but up y/y (+0.6%).
September 1 – The headline Markit Mexico Manufacturing PMI registered 52.2 in August, up from 51.2 in July, to signal a sustained improvement in business conditions. The index hasnow posted above the neutral 50.0 value in each ofthe past 47 months. Notably, the latest upturn in the health of the sector was the second-strongest since May 2016 (after June 2017). Improved business conditions were buoyed by stronger rates of output and new order growth, with was in turn supported by a return to expansion in new export sales. Stronger demand for inputs meant that delivery times lengthened slightly in August, while job creation remained strong.
September 1 –The Markit Canada Manufacturing Purchasing Managers’ Index (PMI) registered 54.6 in August, to remain above the neutral 50.0 threshold for the eighteenth consecutive month. Although down slightly from 55.5 in July, the index signaled a rate of improvement that remained above the long-run series average. Central to the latest overall improvement was an eleventh successive monthly expansion in new orders. Although the weakest recorded in 2017 so far, the rate of growth remained strong and above the long-run series average. New export order growth meanwhile weakened from the previous month and was only modest.
September 1, 2017
September 1 – The Markit final U.S. Manufacturing Purchasing Managers’ Index (PMI) registered 52.8 in August, down slightly from July’s reading of 53.3. Nonetheless, the latest index figure signaled an ongoing improvement in operating conditions across the US manufacturing sector. The upturn was partly driven by an increase in new orders. In line with rising client demand, workforce numbers grew at the fastest pace in six months. However, production levels increased at the weakest rate since June 2016. As a result, the level of outstanding business rose for the first time since April. For the first time since April, the level of outstanding business at manufacturing firms increased.
September 1 – The final Markit Eurozone Manufacturing PMI rose to 57.4, up from 56.6 in July and equaling June’s 74-month high. The PMI has remained above the 50.0 no-change mark for 50 successive months. August saw a strong and accelerated increase in eurozone manufacturing production, as robust demand and rising employment underpinned a solid improvement in overall operating conditions. The solid upswing in new order intakes exerted pressure on capacity, leading backlogs of work to rise at the third-fastest rate in the series history. This encouraged further job creation, with the rate of growth in staffing levels staying close to May’s survey-record high.
September 1 – The headline Nikkei Japan Manufacturing PMI was little changed during August at a level of 52.2 (July: 52.1). The latest reading was indicative of solid growth, and the PMI has now recorded above the 50.0 no-change mark for 12 successive months. Underpinning the ongoing expansion of the sector was a further increase in manufacturing output, the thirteenth in as many months. The rate of expansion was solid, and the best recorded since May. Price data showed that inflationary pressures continued to dissipate, with input costs rising to the slowest degree of 2017 so far. Output charges wereincreased only slightly as a result.
September 1, 2017
September 1 – The Caixin China General Manufacturing PMI registered 51.6 in August, up from 51.1 in July. The health of China’s manufacturing sector has now strengthened in each of the past three months, with the latestupturn the strongest since February. Firmer foreign demand was a key driver of new order growth, with export sales rising to the greatest extent in over seven years. As a result, companies expanded their production schedules and buying activity, while business confidence rose to its highest for five months. However, stricterenvironmental policies were a key factor leading to longer delivery times, whilst inflationary pressures intensified.
September 1 – According to this week's release by the Federal Reserve Board, the Nominal Broad Dollar Index closed the week at 118.26 on Friday, a decrease of three-tenths of one percent from the previous week's close of 118.66. The Index remained below it's 30-day moving average throughout the week, with Friday marking the 81st consecutive day the Index acheived such a result. Over the last six months, the index is down 6.2 percent, while it's off 2.8 percent over the last 12 months.
The nominal broad dollar index is a weighted average of the foreign exchange values of the U.S. dollar against the currencies of a broad group of major U.S. trading partners.
September 1 – On the NYMEX, the near-month WTI crude oil futures (Cushing, OK WTI Future Contract 1) closed the week at $47.29/bbl on Friday, September 1, down $0.58 (-1.2%) from last week's close of $47.87/bbl. Oil prices closed down a fifth-straight weekly loss as traders weighed storm system Harvey's impact on crude production and refinery demand in the Gulf of Mexico region. Active U.S. oil-drilling rigs remained unchanged this week at 759. Compared to last year, oil rigs have increased by 352. Brent Crude on London's ICE Futures exchange closed the week up at $52.75/bbl(+0.6%). Friday's spread between the two was $5.46/bbl, up from last week's spread of $4.54/bbl, and the widest weekly spread since August 2015.
August 31 – The U.S. Energy Information Administration reported that natural gas spot prices fell at most locations this report week (Wednesday, August 23 to Wednesday, August 30). The Henry Hub spot price fell from $2.92 per million British thermal units (MMBtu) last Wednesday to $2.86/MMBtu.
At the New York Mercantile Exchange (Nymex), the September 2017 contract expired Tuesday at $2.961/MMBtu. The October 2017 contract price decreased to $2.939/MMBtu, down 2¢ Wednesday to Wednesday.
9The Aluminum Association, founded in 1933, works globally to aggressively promote aluminum as the most sustainable and recyclable automotive, packaging and construction material in today’s market. The Association represents North America and foreign-based primary producers of aluminum, aluminum recyclers, producers of semi-fabricated products and foundries as well as suppliers to the industry or distributors or jobbers.
The Aluminum Association's statistical programs provide industry information on primary aluminum production, new orders of mill products, industry shipments, end use market estimates, inventories, recycling and foreign trade on a monthly, quarterly and annual basis. Special surveys provide data on specific subjects such as primary capacity, flat roll capacity, inventories and castings shipments. Custom reports are available on a for-fee basis. Web briefings are also available upon request.
Industry OverviewAluminum Statistical Review (Annual Fact Book)Aluminum Highlights (Weekly)Aluminum Situation (Monthly)Summary of Producer Shipments and Inventories (Monthly)
Primary AluminumPrimary Aluminum Production – U.S. and Canada (Monthly)Primary Installed Capacity (Annual)Shipments of Primary Aluminum by Form (Quarterly)
Mill ProductsIndex of Net New Order Receipts for Aluminum Mill Products (Monthly)Can Stock Shipments (Monthly)Electrical Conductor Shipments (Monthly)Extruded Products Shipments and Press Utilization (Monthly)Flat Roll Capacity (Annual)Foil Shipments (Monthly)Forging and Impacts Shipments (Monthly)Rod, Bar, and Wire Shipments (Monthly)Sheet and Plate Shipments (Monthly)
End UseExtrusion Shipments by End Use (Quarterly)Fin Stock Shipments by End Use (Quarterly)Foil Shipments by End Use (Monthly)Sheet and Plate Shipments by End Use (Quarterly)
RecyclingNew Can Stock (Class) Scrap Receipts (Monthly)Used Beverage Can Reclamation (Annual)
Foreign Trade (based on government customs data)Summary of U.S., Canada and Mexico Imports and Exports (by Commodity), MonthlyForeign Trade Online Database - U.S., Canada and Mexico Exports & Imports of Aluminum (By Commodity, by Country)
For a complete list of statistical publications and reports visit our bookstore.
