ALUMINIUM ARB INDICATOR: Arbitrage remains flat despite virus-related freight rate drop

A weak US aluminium market kept market participants away from undertaking arbitrage activities between Southeast Asia and the United States despite plummeting freight rates.

Sustained pressure on aluminium premiums in the US was one of the main factors preventing viable aluminium arbitrage opportunities between London Metal Exchange sheds in Southeast Asia to the US Midwest.
Fastmarkets assessed the aluminium P1020A premium, ddp Midwest US at 13.5-15 cents per lb on Tuesday February 4, widening downward by a half-cent from 14-15 cents per lb one week earlier.
Sharply discounted producer-to-consumer deals have continued to cast bearish sentiment throughout the US physical market throughout the start of the year.

Market participants said those premiums are...

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