The premiums that U.S. purchasers of aluminum have to pay for the lightweight metal to be shipped to the United States hit a record high last week. The numbers surpassed the level reached more than five years ago when trading houses and banks began to participate in warehouse merry-go-round deals in order to collect higher rents.
This latest increase, however, wasn’t driven by merry-go-round deals. It was instead propelled by a tariff holdover and a surge in shipping costs and demand from the Trump administration.
According to Harbor Intelligence, a global researcher focused on the aluminum industry’s outlook and analysis, this caused aluminum’s shipping fee to hit 25.6¢ per pound, which is a few cents higher than the February 2015 record high of 24.5¢ per pound.
Additionally, data shows that the benchmark price of the metal at the London Metals Exchange traded up by nearly 20%. This is aluminum’s best start in nearly a decade, and it was propelled by concerns that China, which is the biggest producer and user of the metal, would be curbing their supply.
The surge of the metal has also been driven by economic recovery across the globe as more countries revive their economies and work to contain the coronavirus. Economic recovery is also expected to increase the demand of everything, from toasters to autos.
Analysts speculate that aluminum is also rising because the largest producer of the lightweight metal, the People’s Republic of China, will decrease its supply in an attempt to reduce its emissions. The country is focused on decarbonization and is working to meet its carbon neutral target.
CEO of Alcoa Corp. Roy Harvey stated that the country’s steps to limit aluminum output will significantly change various aspects of the industry. He is not alone in that thinking. Harbor Intelligence managing director Jorge Vazquez stated that as the U.S. economy was recovering from the coronavirus pandemic, it was pushing freight charges even higher, causing a boom in the demand for aluminum — despite continuing tariffs that have been imposed on the imported metal.
Earlier in March, the blockage at the Suez Canal saw one of the biggest container ships in the world, The Ever Given, blocking traffic for almost a week. This increased concerns about the aluminum market, which was unusually strained, having faced a weeklong delay because of the demand for all products, which included metals as well as other goods.
A number of mining entities are bringing novel innovations to their offerings as a way of gaining even more value. An example is the AABB Gold token by Asia Broadband Inc. (OTC: AABB), a cryptocurrency coin that is backed by the precious metal gold.
NOTE TO INVESTORS: The latest news and updates relating to Asia Broadband Inc. (OTC: AABB) are available in the company’s newsroom at https://ibn.fm/AABB
MiningNewsWire (MNW) is a specialized communications platform focused on developments and opportunities in the global resources sector. The company provides (1) access to a network of wire services via NetworkWire to reach all target markets, industries and demographics in the most effective manner possible, (2) article and editorial syndication to 5,000+ news outlets (3), enhanced press release services to ensure maximum impact, (4) social media distribution via the Investor Brand Network (IBN) to nearly 2 million followers, and (5) a full array of corporate communications solutions. As a multifaceted organization with an extensive team of contributing journalists and writers, MNW is uniquely positioned to best serve private and public companies that desire to reach a wide audience of investors, consumers, journalists and the general public. By cutting through the overload of information in today’s market, MNW brings its clients unparalleled visibility, recognition and brand awareness. MNW is where news, content and information converge.
To receive SMS text alerts from MiningNewsWire, text “BigHole” to 21000 (U.S. Mobile Phones Only)
For more information, please visit https://www.MiningNewsWire.com
MiningNewsWire is part of the InvestorBrandNetwork.