Brazil's average premiums for the aluminium ingot P1020A (taking 100 tonnes as reference) in the spot market were being negotiated at $550-$600 per tonne this week, below the $570-$630 of the past two weeks.

 

"I doubt that anyone would be willing to pay premiums higher than $600," said one buyer.

 

"And even if you were to put prices down, there is still very little interest," he added.

 

Market participants agree that the demand for aluminium in the country remains very low, as Brazil's economy keeps losing momentum, while consumers are still quite well supplied for the short term.

 

"Buyers are not in need of product at the moment, so they will only consider buying metal if you offer a really good deal," said one trader, adding that he has knowledge of a small sized transaction made at $480 last week. This was not considered to be a business within Metal Bulletin's standard specification.

 

Opinions about available supplies varied.

 

While some players were concerned about the impact of an increase in imports, others said there will not be enough metal in the domestic market after the recent cuts in domestic output.

 

"Importers brought a lot of product to Brazilian ports but the expected increase in demand never happened," said one participant.

 

He added that this would keep pressure on premiums in the short term, with very few transactions likely.

 

He expects the market to become busy again from the second half of May, but that should last for just a couple of weeks until June, when the World Cup starts "and the country stops".

 

Another player said the market would remain very quiet until the end of 2014.

 

"This is not the most motivating market at the moment," one trader said.

 

"We might have some good deals coming in soon, in a couple of weeks, but I have no reason to think that the situation will actually change in the next months," he added.