April Market Minute 2024

Supply Chain Disruptions for Aluminum

Did you know that approximately 22% of aluminum imports that enter the United States are routed via Baltimore annually? That means the recent collapse of Baltimore’s Key Bridge has had a resounding impact on the aluminum market, among others.

Almost immediately, the supply chain disruption led to a sharp increase in Midwest aluminum premiums. As of late April, Midwest premiums on aluminum have reached a high of .19/lb. in just a few weeks.

As a reminder, the Midwest Premium is a key pricing indicator for the overall price of aluminum. It is the cost to transport aluminum to the Midwest.

Experts believe this increase could be temporary, but in the near term it has placed pressure on the supply of aluminum.

Galvanized Premiums on the Rise

Are you a buyer of coated steel? If so, you could be in for a near-term price increase. Current premiums for galvanized steel are approximately $400 over hot roll coil prices—a significant departure from historical norms. This shift underscores a substantial market evolution, emphasizing the growing demand for value-added steel products.

Contributing to this increase is the recent price surge in zinc, a key component used in galvanization. Zinc prices spiked by 6 to 8% in early April alone, suggesting potential cost pressures on coating extras for steel products.