Aluminum Highlights
Week Ending: February 3, 2017
An update on Industry activity and economic indicators
Market View
By: Jesús Villegas, Vice President, Aluminum Analysis – HARBOR Aluminum
The views expressed in the “Market View” are those of the author and do not necessarily represent the views of the Aluminum Association
The United States imported a record-high volume of unalloyed aluminum units in Jan-Nov 2016.
US imports of unwrought unalloyed aluminum units (includes P1020 and purity) increased in Jan–Nov 2016 by 58% y/y to
2.03 million mton. For such time frame, this was the highest volume on record.
Overall, the North America region remains the most attractive destination for P1020 aluminum units for various reasons:
a) regional netback (profitability after logistics costs) stands $20–80 per mton over other regions for most P1020
suppliers worldwide (supported further by rising MW premiums); b) limited spot demand in other major regions and
significant oversupply in Asia (confirmed by rising P1020 shipments from Singapore to the US); c) tight LME spreads
forcing suppliers to look for a home for their units; and d) a strong US dollar.
In fact, HARBOR estimates that North American stealth (unreported) P1020 stocks increased in January to a fresh record
high of 1.5 million mton. Despite falling regional primary production, this trend remains driven by record-breaking import
volumes of unalloyed units from various traditional and non-traditional origins.
This report is based on information reported to the Association by participants, which is aggregated by the Association. While the Association
believes that its statistical procedures and methods are reliable, it does not warrant the accuracy or completeness of the data. All data
contained herein are subject to revision. For further information, contact Ryan Olsen, V.P. Business Information and Statistics at 1-703-3582984 or email [email protected]. © The Aluminum Association, Inc. All rights reserved.
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Industry Activity
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January 30 – Aluminum net shipments (including
exports) by domestic U.S. and Canadian facilities
totaled an estimated 1,712 million pounds during
December, down 1.9 percent from the December
2015 total of 1,746 million pounds. Shipments of
aluminum mill products decreased 2.8 percent
from the previous year to 1,110 million pounds.
For the year, mill product shipments were off
three-tenths of one percent. Shipments of
aluminum ingot for castings, exports and
destructive uses decreased by four-tenths of one
percent year-over-year in December, but for the
year they increased 5.8 percent over 2015.
Preliminary producer shipments in 2016 totaled
23,422 million pounds, up 1.6 percent over last
year. December inventory levels totaled an
estimated 3,089 million pounds, up 10.6 percent
over the previous month and up 2.9 percent yearover-year.
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The Aluminum Association
February 3, 2017
Economic Activity
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January 31 – Statistics Canada report that
Canada’s Industrial Product Price Index (IPPI)
increased four-tenths of one percent in December
(112.1), after increasing four-tenths of one
percent in November. The main reason for the
increase in December was higher prices for energy
and petroleum products (+5.5%), which posted
their largest gain since May 2016 when prices
rose 6.6%. The IPPI excl. energy and petroleum
products declined four-tenths of one percent.
Alumina and aluminum production prices
increased two-tenths of one percent over
November, and are up 2.3 percent over a year
ago. The overall IPPI rose 2.2 percent during the
12-month period ending in December, following
a 1.5 percent increase in November.
January 31 – Statistics Canada report that real
GDP in Canada increased four-tenths of one
percent in November, following a two-tenths of
one percent decrease in October. The output of
goods-producing industries rose by nine-tenths of
one percent, while service-producing industries
edged up two-tenths of one percent. Total
manufacturing output increased 1.4 percent, as
both durable and non-durable goods
manufacturing increased. Durable-goods
manufacturing was up 1.3 percent, with the
largest contributions coming from manufacturers
of machinery, computer and electronic products
and primary metals.
February 1 – Preliminary data published by Ward's
Automotive show that actual U.S. light vehicle
sales totaled 1.14 million units during January
2017, down 1.7 percent year over year. While, the
pull-ahead effect of holiday promotions in
December was not as strong as expected, the
average daily sales rate still dropped 23.8 percent
between the two months. January had 24 selling
days this year compared with 24 days in 2016. In
terms of the seasonally adjusted annual rate,
January reached 17.5 million-units, well below the
18.3 million in the previous month but greater
than the 17.4 million year-ago.
The Aluminum Association
February 3, 2017
Economic Activity Cont…
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February 1 – The U.S. Census Bureau of the
Department of Commerce reported that the
annual rate of construction spending during
December 2016 totaled an estimated $1,181.5
billion, seasonally adjusted, down two-tenths of
one percent month-over-month, but up 4.2
percent over the December 2015 estimate of
$1,133.7 billion. Residential construction
increased four-tenths of one percent over the
previous month, totaling a seasonally adjusted
annual rate of $473.3 billion. Nonresidential
construction was at a seasonally adjusted annual
rate of $708.2 billion in December, down seventenths of one percent from November, but up 4.6
percent year-over-year. Construction spending in
2016 amounted to $1,162.4 billion, 4.5 percent
above the $1,112.4 billion in 2015.
February 3 – Total nonfarm payroll employment
increased by 227,000 in January, above the
average monthly gain of 186,800 over the prior 12
months, the U.S. Bureau of Labor Statistics
reported. The unemployment rate increased
slightly over the December rate to 4.8 percent as
employment growth occurred in retail trade,
construction, and financial activities.
Manufacturing employment increased by 5,000
jobs, the sector's second consecutive monthly
gain, holding the average monthly change for the
sector to a reduction of 3,800 jobs over the last 12
months. In total, manufacturing employment has
declined by roughly 46,000 jobs over the last year.
The Aluminum Association
February 3, 2017
Global Trends
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February 1 – The Markit final U.S. Manufacturing
Purchasing Managers’ Index (PMI) registered 55.0
in January, up from 54.3 in December. Data
revealed a renewed acceleration in output growth
among manufacturing firms, with the rate of
expansion reaching its strongest for 22 months.
Improving business conditions were also reflected
in a sustained upturn in payroll numbers and the
steepest rise in stocks of finished goods since the
index began in 2007. All five index components
exerted a positive influence in the headline PMI in
January, led by the sharpest expansion of incoming
new work for over two years.
February 1 –The Markit Canada Manufacturing
Purchasing Managers’ Index (PMI) registered 53.5
in January, up from 51.8 in December and above
the neutral 50.0 threshold for the eleventh
consecutive month. Moreover, the headline PMI
pointed to the strongest upturn in operating
conditions for just over two years. A robust and
accelerated expansion of overall production
volumes was the key factor boosting the
manufacturing sector in January. Higher levels of
output have been recorded in each of the past
three months, with the latest rise the strongest
since December 2014.
February 1 – The headline Markit Mexico
Manufacturing PMI registered 50.8 in January.
That was up from 50.2 in December, but
nonetheless indicative of a marginal rate of
improvement that remained noticeably lower than
the survey’s historical average. Providing some
support to the PMI in January were increases in
both output and new orders. Output rose modestly
after posting a slight fall in December, while there
was a similarly-sized increase in new orders. In
both cases, the respective indices remained muted
by historical standards amid reports of ongoing
economic and political uncertainty.
The Aluminum Association
February 3, 2017
Global Trends Cont...
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February 1 – The Caixin China General
Manufacturing PMI posted 51.0 in January to
signal a further improvement in the health of the
sector. However, the reading was down from
December’s 47-month record of 51.9, and was
consistent with only a marginal rate of
improvement. the rate of improvement slowed
since December, as output and new orders
increased at weaker rates amid a further reduction
in employment. In contrast, new export work rose
at the fastest pace since September 2014. At the
same time, inflationary pressures remained sharp,
with both input costs and output charges
increasing at rates scarcely seen throughout the
past five years.
February 1 – The headline Nikkei Japan
Manufacturing PMI posted 52.7 in January, up
from 52.4 in December, signaling a stronger
improvement in operating conditions. In fact, the
latest reading was the highest since March 2014,
reflecting expansions in output, new orders and
employment. Production rose for the sixth
consecutive month at the start of 2017. Moreover,
the rate of expansion was little-changed from
December’s 12-month high. Data also pointed to
the sharpest increase in new work inflows since
December 2015. Lastly, manufacturers continued
to hire additional workers in January. In fact, the
rate of job-creation was little changed from
December’s 32-month high.
February 1 – The final Markit Eurozone
Manufacturing PMI posted at 55.2 in January, up
from 54.9 in December, marked improvement in
business conditions at eurozone manufacturers.
Output growth held steady at December’s 32month record, underpinned by the strongest
inflows of new business and the fastest job
creation since the first half of 2011. Price pressures
continued to intensify, however, with rates of
inflation in input costs and output charges both
gathering pace. National PMI data signaled that
growth was fastest in Austria, the Netherlands and
Germany.
The Aluminum Association
February 3, 2017
Energy
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February 2 – The U.S. Energy Information
Administration reported that natural gas spot
prices fell at most locations this report week
(Wednesday, January 25 to Wednesday, February
1). The Henry Hub spot price fell from $3.25 per
million British thermal units (MMBtu) last
Wednesday to $3.12/MMBtu. At the New York
Mercantile Exchange (Nymex), the February 2017
contract expired Friday at $3.391/MMBtu. The
March 2017 contract decreased to
$3.168/MMBtu, down 18¢ Wednesday to
Wednesday
February 3 – On the NYMEX, near-month WTI
crude oil futures (Cushing, OK WTI Future Contract
1) closed the week at $53.83/bbl on Friday,
February 3, up $0.66 (+1.2%) from last week's
close of $53.17/bbl. Oil futures saw a modest gain
Friday to finish higher for the week, buoyed by
more data backing up production cuts by major oil
producers, but prices show little reaction to news
that the U.S. has imposed sanctions on Iran.
Active U.S. oil-drilling rigs increased by 17 this
week to 583, after increasing by 15 the week
before. Compared to last year, oil rigs have
increased by 116. Brent Crude on London's ICE
Futures exchange also closed the week up at
$56.81/bbl (+2.3%). Friday's spread between the
two was $2.98/bbl, up from last week's spread of
$2.35/bbl.
U.S. Dollar
February 3 – According to this week's release by
the Federal Reserve Board, the Nominal Broad
Dollar Index closed the week at 125.28 on Friday,
decreasing 1.2 percent from last week's close of
126.84. Last week, the Index declined nine-tenths
of one percent. Over the last six months, the index
is up 3.2 percent, while it's up 1.7 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.
The Aluminum Association
February 3, 2017
The 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 Overview
Aluminum Statistical Review (Annual Fact Book)
Aluminum Highlights (Weekly)
Aluminum Situation (Monthly)
Summary of Producer Shipments and Inventories (Monthly)
Primary Aluminum
Primary Aluminum Production – U.S. and Canada (Monthly)
Primary Installed Capacity (Annual)
Shipments of Primary Aluminum by Form (Quarterly)
Mill Products
Index 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 Use
Extrusion 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)
Castings
U.S. Foundry Castings Shipments (Quarterly)
Canada Foundry Castings Shipments (Annual)
Recycling
New 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), Monthly
Foreign 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.
The Aluminum Association
February 3, 2017
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