European aluminium premiums have dipped below $100 per tonne in recent days due to a prolonged tightness in London Metal Exchange spreads, but could rebound now that the market is back in contango, despite the prospect of US import duties, market participants said.
The benchmark Rotterdam P1020a duty-unpaid premium dropped to $95-105 per tonne on Friday March 2 from $100-107 per tonne the day prior, with participants selling lower because of pressure from unfavorable LME spreads throughout February. It was the first time the premium, which remained at $95-105 per tonne on Monday March 5, has fallen since October 2017. Although the cash/to-three-month spread has swung back to a $13 per tonne contango, the persistent backwardation throughout February forced some participants to sell lower late last week. The backwardation touched $50 per tonne on February 20, its widest in 11 years. The spreads prompted sluggish volumes on...