Follow us on:

Aluminum Highlights

Week Ending: February 17, 2017An update on Industry activity and economic indicators

Market ViewBy: Paul Williams, Head of Aluminium – CRU Analysis

The views expressed in the “Market View” are those of the author and do not necessarily represent the views of the Aluminum Association

The aluminium price has continued to rise in recent weeks, with the LME three month price scaling the $1900/t level recently. The LME price is taking its lead from developments in the Chinese aluminium market where the SHFE price has risen to above RMB14,000/t. The rise in price in China has come despite a growing market surplus. Instead, the price is being influenced by the potential cuts in Chinese production later in the year from environmental controls. Indeed, market expectations of such cuts occurring in China are growing. However, as of now production is continuing to accelerate from a combination of smelter restarts and the ramp up of new capacity. CRU forecasts that smelter output will rise nearly 17% y-o-y in Q1 2017 and that the market in China will be in surplus to the tune of 1 million tonnes in the first three months of this year. This is leading to a strong rise in reported stock levels which is set to continue.

Outside of China the market remains in deficit and there was upward pressure on global ingot premiums in the early part of this year. This was driven mainly by the growing imbalance in the US market, and import requirements are set to rise further in 2017.

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 1-703-358-2984 or email rolsen@aluminum.org. © The Aluminum Association, Inc. All rights reserved.

Drive Aluminum for a Safer, Stronger, Greener VehicleLearn more from former NASA astronaut Dan Tani on how today’s aluminum producers are pushing the boundaries on fuel economy, safety, strength and life cycle energy savings.

Learn More

The Aluminum Association

2Industry Activity

February 17, 2017

February 14 – Estimated shipments of Aluminum Foil by U.S. and Canadian producers totaled 75.0 million pounds during January 2017, off two-tenths of one percent from the January 2016 total of 75.2 million pounds. Compared to the previous month, shipments increased 20.1 percent over the December 2016 total of 62.5 million pounds. Revised shipments for 2016 totaled 969.6 million pounds, up 2.8 percent over the 2015 total of 943.0 million pounds.

February 14 – Shipments of can stock by domestic producers totaled 343.8 million pounds during January 2017, a rise of 3.1 percent over the January 2016 total of 333.4 million pounds. Compared to the previous month, shipments increased 9.1 percent over the December 2016 total of 315.1 million pounds. Revised shipments for 2016 totaled 4,154.4 million pounds, off six-tenths of one percent from the 2015 total of 4,178.3 million pounds.

Compared to January 2016, producer shipments of can stock to U.S. markets rose 2.2 percent to 292.9 million pounds, while exports were up 8.8 percent to 50.9 million pounds.

February 14 – Estimated net shipments of Aluminum Sheet and Plate by U.S. and Canadian producers totaled 703.4 million pounds during January 2017, a rise of 5.8 percent over the January 2016 total of 664.8 million pounds. Compared to the previous month, shipments increased 11.4 percent over the December 2016 revised total of 631.2 million pounds. Revised shipments for 2016 totaled 8,386.7 million pounds, up six-tenths of one percent over the 2015 total of 8,335.0 million pounds.

Shipments of Can Stock totaled 343.8 million pounds during January 2017, up 3.1 percent over the January 2016 total of 333.4 million pounds, while shipments of Non-heat Treatable Sheet(excluding Can Stock) rose 5.1 percent to 223.0 million pounds and shipments of All Other Sheet and Plate increased 14.5 percent to 136.6 million pounds.

The Aluminum Association

3Industry Activity Cont…

February 17 – Shipments of Aluminum Extruded Products (extruded shapes, pipe & tube, and rod & bar) by U.S. and Canadian producers totaled an estimated 428.1 million pounds during January 2017, a rise of 1.7 percent over the January 2016 total of 420.9 million pounds. Compared to the previous month, shipments increased 26.0 percent over the December 2016 revised total of 339.7 million pounds. Preliminary shipments for 2016 totaled a revised 5,167.2 million pounds, up 1.1 percent over the 2015 total of 5,112.8 million pounds.

February 15 – New can stock (class) scrap receipts totaled 55.1 million pounds during January 2017, off 1.1 percent from the January 2016 total of 55.7 million pounds. Compared to the previous month, receipts rose 2.9 percent over the December 2016 total of 53.6 million pounds. Class scrap receipts for 2016 totaled 685.1 million pounds, up six-tenths of one percent over the 2015 total of 681.2 million pounds.

February 17 – Estimated shipments of Aluminum Forgings and Impacts by U.S. and Canadian producers totaled 30.3 million pounds during January 2017, an increase of 15.3 percent over the January 2016 total of 26.3 million pounds. Compared to the previous month, shipments rose 27.4 percent over the December 2016 total of 23.8 million pounds. Preliminary shipments for 2016 totaled 316.2 million pounds, off 5.3 percent from the 2015 total of 334.0 million pounds.

February 17, 2017

The Aluminum Association

4Economic Activity

February 15 – The Federal Reserve Board announced that U.S. industrial productiondecreased three-tenths of one percent in Januaryafter increasing six-tenths of one percent in December (r). Manufacturing output increased two-tenths of one percent m/m. Compared to last year, manufacturing output in January increased five-tenths of one percent, while the production of durable goods increased 1.1 percent m/m and nondurable goods declined two-tenths of one percent. At 104.6 percent of its 2012 average, total industrial production in January was at about the same level as it was a year earlier. Capacity utilization for the industrial sector fell 0.3 percentage point in January to 75.3 percent, a rate that is 4.6 percentage points below its long-run (1972–2016) average.

February 14 – The Producer Price Index for final demand (which includes goods and services) increased six-tenths of one percent in January, seasonally adjusted, the U.S. Bureau of Labor Statistics reported. Final demand prices increased two-tenths of one percent in December and five-tenths of one percent in November. The index for final demand goods increased 1.0 percent andfinal demand goods less foods and energy increased four-tenths of one percent m/m. On an unadjusted basis, the final demand index increased 1.6 percent for the 12 months ended in January.

February 15 – The U.S. Consumer Price Index for All Urban Consumers (CPI-U) increased six-tenths of one percent in January on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported.This followed last month's reading in which the index increased three-tenths of one percent m/m. The core consumer prices (index for all items less food and energy) increased three-tenths of one percent, after an increase of two-tenths of one percent the prior month. The unadjusted all items index rose 2.5 percent over the last 12 months, while the core price index has increased 2.3 percent over the same period.

February 17, 2017

The Aluminum Association

5Economic Activity Cont…

February 17 – Preliminary data published by Ward's Automotive show that North American (Canada, Mexico, and the United States) light vehicle production totaled 1.39 million units during January 2017, up 2.0 percent year-over-year. U.S. production increased 3.0 percent y/y, while Mexican and Canadian production increased 4.4 percent and decreased 5.8 percent, respectively. Production of medium and heavy trucks totaled 34,187 units in January, down 9.3 percent from a year ago. Of the 1.39 million units, light-truck production soared 9.2 percent to 910,149 units, while car output fell 9.4 percent to 476,590. However, the small-car total gained 11.7 percent over year-ago, reaching 251,289 units.

February 16 – The U.S. Census Bureau and the Department of Housing and Urban Development jointly announced that privately-owned housing starts in January 2017 were at a seasonally adjusted annual rate of 1,246,000 units, down 2.6 percent from the revised December 2016 rate of 1,279,000. Compared to a year ago, housing starts increased 10.5 percent over the January 2016 rate of 1,128,000. Privately-owned housing units authorized by building permits in January were at a seasonally adjusted annual rate of 1,285,000. This was 4.6 percent above the revised December rate of 1,228,000, and 8.2 percent above the January 2016 estimate of 1,188,000. In 2016, privately-owned housing starts and authorized permits were estimated up 5.6 percent and down eight-tenths of one percent compared to 2015, respectively.

February 17, 2017

The Aluminum Association

6Energy

February 17 – Federal offices were closed on February 20, 2017 in observance of President's Day. Our weekly update of the Nominal Broad Dollar Index will resume next week.

Last week, the Index closed at 125.82, increasing four-tenths of one percent from the Friday, February 3 close of 125.28. Over the last six months, the index is up 4.3 percent, while it's up 1.6 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.

February 17 – On the NYMEX, near-month WTI crude oil futures (Cushing, OK WTI Future Contract 1) closed the week at $53.40/bbl on Friday, February 17, down $0.46 (-0.9%) from last week's close of $53.86/bbl. Weekly oil futures fell for the first time in roughly a month, caught between larger-than-expected growth in U.S. crude stocks and reports that OPEC members may exercise an option to extend a pact to cut production by six months. Active U.S. oil-drilling rigs increased by 6 this week to 597, after increasing by 8 the week before. Compared to last year, oil rigs have increased by 184. Brent Crude on London's ICE Futures exchange closed the week down at $55.81/bbl (-1.6%). Friday's spread between the two was $2.41/bbl, down from last week's spread of $2.84/bbl.

February 16 – The U.S. Energy Information Administration reported that natural gas spot prices fell across the country this report week (Wednesday, February 8 to Wednesday, February 15). The Henry Hub spot price fell from $3.05 per million British thermal units (MMBtu) last Wednesday to $2.92/MMBtu. At the New York Mercantile Exchange (Nymex), the March 2017 contract fell 20¢ from $3.126/MMBtu last Wednesday to $2.925/MMBtu.

U.S. Dollar

February 17, 2017

The Aluminum Association

7The 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)

CastingsU.S. Foundry Castings Shipments (Quarterly)Canada Foundry Castings Shipments (Annual)

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.

February 17, 2017