The London Metal Exchange three-month price for aluminium was at a year-to-date high and spreads have flipped back into contango, but bullish futures have yet to materialise in a bullish physical market, Fastmarkets heard on Thursday November 12.
The benchmark three-month aluminium price has remained consistently above $1,900 per tonne this week. It hit a year-to-date high of $1,935 per tonne on November 9, which was also the highest since March 2019.
"The aluminium price is comfortable at a three-month high and the spreads are looking much better. But I still feel like the market is being cautious and not totally buying into it," a broker said.
The benchmark cash/three-month spread has flipped back into backwardation and widened significantly this week. It was most recently in a $17.75 per tonne contango compared with a $1 per tonne backwardation on November 3.
The recent LME banding report also showed that the one long futures holder in November fell back into the 10-19% bracket from 30-39%; which means that there was no longer a dominant position holder.
"By contrast, longer-dated spreads have narrowed as...