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Platts Brazil Aluminum Premium Price Assessments: Metals Price Assessments

What are the Platts Brazil Aluminum Premium Price Assessments?

Brazil Aluminum Premium

Platts began assessing primary aluminum prices in Brazil in May 2014, after a year of research prompted by industry requests.

Producers and traders active in Brazil foresaw that the country was rapidly shifting to a net importer of aluminum as rising power costs forced curtailments.

Platts assesses two weekly premiums or discounts to the London Metal Exchange cash settlement price for P1020 -- one that reflects the price for imported primary aluminum, and one for the domestic market:

The Platts CIF Brazil aluminum premium duty unpaid is assessed basis CIF Brazil (to include major ports Santos/SP, Itajai/SC, Itaguai/RJ and Sao Francisco do Sul/SC), duty unpaid, VAT not included (ICMS, PIS/Cofins and IPI), delivery within 30-60 days, typical volumes up to 2,000 mt, payment terms net-30 days.

The Platts aluminum premium delivered Southeast Brazil is the weekly assessment of the premium or discount to the LME cash settlement price for spot physical high-grade aluminum P1020A, 99.7% Al purity in standard ingot, sow and T-Bars, delivered within 30 days to customers' works in the Southeast region of Brazil (including Sao Paulo, Rio de Janeiro, Minas Gerais and Espirito Santo), duty-paid, VAT not included (ICMS, PIS/Cofins and IPI). Payment terms net-7 to net-10 days, based on a typical order size of 100 mt.

Platts also publishes a domestic "all-in" price -- the Brazil aluminum market price -- that includes the domestic premium assessment and reflects the weekly assessment of the delivered value of spot physical high-grade aluminum P1020, 99.7% Al purity, standard ingot, sow and T-Bars.

The assessment is for delivery within 30 days to customers' works in the Southeast region of Brazil (including Sao Paulo, Rio de Janeiro, Minas Gerais and Espirito Santo), duty-paid, VAT not included (ICMS, PIS/Cofins and IPI). Payment terms net-7 to net-10 days, full-truckload, 25 mt.

How do we assess Platts Brazil Aluminum prices?

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Platts conducts a weekly survey of producers, traders and consumers of P1020 active in the Brazilian spot market, including domestic companies and international firms that export to Brazil.

Platts monitors the market throughout the week and considers in its assessments all of the information provided regarding deals, bids and offers in the market, reflecting in its assessment the tradable value as of Friday.

Any transactions, bids or offers relating to imports are analyzed for inclusion in the CIF Brazil premium assessment which is normalized to major ports Santos/SP, Itajai/SC, Itaguai/RJ and Sao Francisco do Sul/SC), duty unpaid, VAT not included (ICMS, PIS/Cofins and IPI), delivery within 30-60 days, typical volumes up to 2,000 mt, payment net-30 days.

Prices for volumes, grade, shape or payment terms that differ from the standard specification may be normalized to the typical range. FOB values from exporting regions may also be considered in the assessment process.

The delivered Southeast Brazil premium and all-in price assessments take into account the spot transactions, bids and offers that are reported within the country from either domestic production or nationalized imports.

Price data are normalized to reflect delivery within 30 days to customers' works in the Southeast region of Brazil (including Sao Paulo, Rio de Janeiro, Minas Gerais and Espirito Santo), duty-paid, VAT not included (ICMS, PIS/Cofins and IPI).

Payment terms are net-7 to net-10 days, based on a typical order size of 100 mt.

Prices for other shapes, grades, locations, delivery periods, volumes and payment terms may be normalized to this standard specification, as are deals that are reported on an ex-works basis.

Evolution of Platts Brazilian Aluminum coverage

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The Brazilian aluminum market has historically looked toward the US for direction when it comes to primary aluminum pricing.

Supply contracts for aluminum and aluminum products that are formula based have often been linked to the Platts US Midwest Transaction price.

In 2013, Brazil was moving toward an aluminum market deficit, with expectations of booming demand for the World Cup and Olympics, while production was being curtailed due to high power costs.

Market participants anticipated that Brazil would need better indicators of its own pricing dynamics rather than following other markets.

Platts launched Brazilian aluminum price assessments in May 2014, and some supply contracts for aluminum P1020 and downstream aluminum products shifted toward either a CIF Brazil or delivered Southeast Brazil basis.

Brazil, as expected, shifted to become a net importer, but quotas and the complicated tax and warehousing rules in Brazil have limited imports to some extent.

While Brazilian import premiums tend to follow international levels, to draw aluminum from other regions, Brazilian domestic premiums have sometimes lagged international levels.

Both premiums provide mechanisms for pricing aluminum in Brazil based on its own fundamentals.


Metals Price Assessment Methodology



How do I access the prices of Platts Brazil Aluminum Premiums?

The Platts Brazil Aluminum Premium Price Assessments are alongside other global aluminum prices available in the following Platts services:

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