The spot US Midwest aluminum premium surged by 26.3% over January 2-31, on the back of 

cuts in Canadian supplies, local transportation constraints, and uncertainty over results of the 

administration's  Section  232  investigation  on  whether  aluminum imports were harming US 

national security. 

S&P Global Platts assessed the US Midwest premium at 12 cents/lb delivered on Wednesday, 

up from 9.5 cents/lb on January 2. 

The  LME  February/March  timespread  was  in  backwardation  of  $4-$9.5/mt  in  January, 

according to LME data. The premiums to LME typically weaken when the market structure is 

backwardated,  but  this  time t here was little impact on the premiums as the US had strong 

appetite for aluminum, though this was not the case in other markets. 

Aluminum  premiums  in  other  markets  rose,  tracking  the US, but at varied levels reflecting 

domestic stock  levels, supply  and  demand  conditions,  as  well  as m arket    participants' 

exposure to the LME spreads. 

The CIF Japan spot premium jumped 12% over January, the European duty-unpaid premium 

rose 8.1% and Brazil's CIF duty-unpaid premium edged up 3%. 

The Japanese premium, which rose to $98.50-$110/mt CIF on January 31 from $90-$96/mt o

n  January 4,  was  the  most  affected  by  the  US  premiums as Russian, Australian, Middle 

Eastern and South African production was shipped to the US rather than to Japan, which saw 

tight stocks especially in the Yokohama port area. 

It was, however, not a continuous rise over January. 

The  CIF  Japan premium averaged  at $93/mt in the week of January 4-5, fell to $91.875/mt 

over January 9-12, rose to $96.20/mt over January 15-19, averaged at $102/mt over January 

22-26, and at $104.17/mt over January 29-31. 

Downward pressure came from the LME spreads that caused some Japanese consumers to 

postpone buying.