Market participants are split on whether rising aluminium premiums in Asia are bullish or bearish for premiums in Europe.
Higher premiums in China make it more lucrative to focus on that region rather than on Europe, the majority of participants told Fastmarkets throughout last week. This is propelling the Rotterdam premium higher by driving tonnages away from this market.
Fastmarkets assessed the aluminium P1020A premium, in-whs dup Rotterdam at $100-105 per tonne on Friday in relatively quiet conditions, narrowing upward from $95-105 per tonne on Thursday.
"The pull of China is keeping things elevated, and it's left everywhere else short," a trader in Europe said. "With the [expected] switchover to [value-added products] and Russian and Indian material going to Asia, Europe might begin to feel prematurely tight."
Several producers have switched to making P1020 rather than value-added products (VAP) to meet changes in demand during the Covid-19 pandemic. But they are likely to switch back for 2021.
"Asia is the place to do business at the moment. That...