The London Metal Exchange trades a primary aluminium contract for metal meeting the P1020A specification, delivered in lots through LME-approved warehouses. Its cash and three-month prices, along with the official settlement price, are used worldwide as the base for physical contracts. Physical buyers then pay a regional premium on top to cover location, form, logistics and market tightness.
Why it matters when buying
- Indian primary ingot, billet and wire rod prices usually move with LME, the rupee-dollar rate and the local premium, so quotes can change daily.
- Agree whether a quote is a fixed price or linked to an LME average, and for which period.
- Secondary alloys and scrap follow LME only loosely, because local scrap supply and demand also drive them.
- MCX in India also trades aluminium contracts that many domestic traders watch.
- When comparing quotations, line up the basis: LME reference, premium, freight, GST and payment terms.
Notes
Price risk can be hedged on exchanges, but that needs expert advice. Read what drives aluminium prices in India, and check current rates with suppliers rather than relying on old figures. See primary aluminium.