The aluminium import arbitrage between the United States and Asia tightened this month for both duty-free and duty-paid material, with market participants noting that the arbitrage opportunity is looking less attractive.
The differential between canceling aluminium without the 10% Section 232 tariff from London Metal Exchange-listed warehouses in Asia and shipping the material into the US Midwest has dipped from the record-high levels in Metal Bulletin's monthly calculation.Falling LME aluminium prices, which were down 6% in July, have contributed to the tightening arbitrage alongside lower US Midwest premiums that were affected by a large backwardation in LME spreads. https://www.metalbulletin.com/Article/3817496/Growing-backwardation-on-LME-aluminium-contracts-hits-US-P1020-premium.html "Overall arbitrage opportunities seem limited or unattractive until other market conditions and underlying price spreads become clearer," a market source said. For duty-free metal originating from warehouses in Singapore, the estimated arbitrage fell below $300 per tonne to $299.23 per tonne in June for shipments of 10,000 tonnes (via break bulk shipments) down from $330.51 per tonne the previous month. In Busan, the estimated...